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7 

ENVIRONMENTAL 
IMPLICATIONS OF NAFTA 



V 4. 11 53: 103-80 ^^^^ 

Environnental Inplications of KAFTA. . . ^ '^^^ 

COMMITTEE ON 

MERCHANT MARINE AND FISHERIES 

HOUSE OP REPRESENTATIVES 

ONE HUNDRED THIRD CONGRESS 

FIRST SESSION 
ON 

THE ENVIRONMENTAL IMPACT THAT THE NORTH 
AMERICAN FREE TRADE AGREEMENT (NAFTA) 
WOULD HAVE ON THE UNITED STATES 



NOVEMBER 10, 1993 



Serial No. 103-80 



Printed for the use of the Committee on Merchant Marine and Fisheries 










'^ fPX'. 



U.S. GOVERNMENT PRINTING OFFICE 
75-696 CC WASHINGTON : 1994 

For sale by the U.S. Government Printing Office 
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402 
ISBN 0-16-044004-1 



7 

ENVIRONMENTAL 
IMPLICATIONS OF NAFTA 



Y 4. N 53: 103-80 ^^^,^ 

KING 

EnuironneDtal Inplications of HflFTfl... *^'™^ 

COMMITTEE ON 

MERCHANT MARINE AND FISHERIES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRD CONGRESS 

FIRST SESSION 

ON 

THE ENVraONMENTAL IMPACT THAT THE NORTH 
AMERICAN FREE TRADE AGREEMENT (NAFTA) 
WOULD HAVE ON THE UNITED STATES 



NOVEMBER 10, 1993 



Serial No. 103-80 



Printed for the use of the Committee on Merchant Marine and Fisheries 



"'"'■''Clt. 







U.S. GOVERNMENT PRINTING OFFICE '" ._ 

75-696 CC WASHINGTON : 1994 

For sale by the U.S. Government Printing Office 
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402 
ISBN 0-16-044004-1 



^%^ 



COMMITTEE ON MERCHANT MARINE AND FISHERIES 
GERRY E. STUDDS, Massachusetts, Chairman 



WILLIAM J. HUGHES, New Jersey 

EARL HUTTO, Florida 

W.J. (BILLY) TAUZIN, Louisiana 

WILLIAM O. LIPINSKI, Illinois 

SOLOMON P. ORTIZ, Texas 

THOMAS J. MANTON, New York 

OWEN B. PICKETT, Virginia 

GEORGE J. HOCHBRUECKNER, New York 

FRANK PALLONE, Jr., New Jersey 

GREG LAUGHLIN, Texas 

JOLENE UNSOELD, Washington 

GENE TAYLOR, Mississippi 

JACK REED. Rhode Island 

H. MARTIN LANCASTER, North CaroUna 

THOMAS H. ANDREWS, Maine 

ELIZABETH FURSE, Oregon 

LYNN SCHENK, California 

GENE GREEN, Texas 

ALCEE L. HASTINGS, Florida 

DAN HAMBURG, Cahfornia 

BLANCHE M. LAMBERT, Arkansas 

ANNA G. ESHOO, California 

THOMAS J. BARLOW, III, Kentucky 

BART STUPAK, Michigan 

BENNIE G. THOMPSON, Mississippi 

MARIA CANTWELL, Washington 

PETER DEUTSCH, Florida 

GARY L. ACKERMAN, New York 

Jeffrey R. Pike, Chief of Staff 

Thomas R. Kitsos, Chief Counsel 

Mary J. Fusco Kitsos, Chief Clerk 

Harry F. Burroughs, Minority Staff Director 



JACK FIELDS, Texas 

DON YOUNG, Alaska 

HERBERT H. BATEMAN, Virginia 

JIM SAXTON, New Jersey 

HOWARD COBLE, North Carolina 

CURT WELDON, Pennsylvania 

JAMES M. INHOFE, Oklahoma 

ARTHUR RAVENEL, Jr., South Carohna 

WAYNE T. GILCHREST, Maryland 

RANDY "DUKE" CUNNINGHAM, California 

JACK KINGSTON, Georgia 

TILLIE K. FOWLER, Florida 

MICHAEL N. CASTLE, Delaware 

PETER T. KING, New York 

LINCOLN DIAZ-BALART, Florida 

RICHARD W. POMBO, California 

HELEN DELICH BENTLEY, Maryland 

CHARLES H. TAYLOR, North CaroUna 

PETER G. TORKILDSEN, Massachusetts 



(II) 



CONTENTS 



Page 

Hearing held November 10, 1993 1 

Statement of: 

Babbitt, Hon. Bruce, Secretary of the Interior 10 

Prepared statement 75 

Browner, Carol M., Administrator, U.S. Environmental Protection Agen- 
cy 14 

Prepared statement 80 

Dudley, Barbara, Executive Director of Greenpeace U.S 47 

Prepared statement 99 

Fields, Hon. Jack, a U.S. Representative from Texas, and Ranking Minor- 
ity Member, Committee on Merchant Marine and Fisheries 3 

Green, Hon. Gene, a U.S. Representative from Texas 6 

Hair, Jay D., President, National Wildlife Foundation 52 

Prepared statement 139 

Kantor, Ambassador Michael, U.S. Trade Representative 6 

Prepared statement 54 

Lipinski, Hon. William O., a U.S. Representative from Illinois, and Chair- 
man, Subcommittee on Merchant Marine 4 

Ortiz, Hon. Solomon P., a U.S. Representative from Texas, and Chair- 
man, Subcommittee on Oceanography, Gulf of Mexico, and the Outer 

Continental Shelf 5 

Pope, Carl, Executive Director, Sierra Club 48 

Prepared statement 112 

Schenk, Hon. Lynn, a U.S. Representative from California 35 

Schlickeisen, Rodger, President, Defenders of Wildlife 50 

Prepared statement 127 

Studds, Hon. Gerry E., a U.S. Representative from Massachusetts, and 

Chairman, Committee on Merchant Marine and Fisheries 1 

Young, Hon. Don, a U.S. Representative from Alaska, and Ranking Mi- 
nority Member, Subcommittee on Fisheries Management 4 

Additional material supplied: 

Imperial Beach, CA, City Council Resolution No. 93-4266 156 

Kantor, Ambassador Michael: Answers to questions of Mr. Tauzin 163 

Communications submitted: 

Berkman, David (Animal Protection Institute): Letter of November 9, 

1993, to Hon. Gerry E. Studds with attachment 158 

Silbergeld, Mark (Consumers Union): Letter of October 20, 1993, to Hon. 

Robert T. Matsui 151 

(HI) 



ENVIRONMENTAL IMPLICATIONS OF NAFTA 



WEDNESDAY, NOVEMBER 10, 1993 

House of Representatives, 
Committee on Merchant Marine and Fisheries, 

Washington, DC. 
The Committee met, pursuant to call, at 10:00 a.m., in room 
1334, Longworth House Office Building, Hon. Gerry E. Studds 
(Chairman of the Committee) presiding. 

Present: Representatives Studds, Hughes, Tauzin, Lipinski, Pick- 
ett, Hochbrueckner, Pallone, Laughlin, Unsoeld, G. Taylor, An- 
drews, Schenk, Green, Hamburg, Eshoo, Stupak, Cantwell, Acker- 
man, Fields, Saxton, Coble, Weldon, Inhofe, Gilchrest, Kingston, C. 
Taylor, Torkildsen, and Dickey. 

Staff Present: Jeffrey Pike, Tom Kitsos, Mary Kitsos, Sue 
Waldron, Karen Steuer, Harry Burroughs, Cynthia Wilkinson, Tom 
Melius, Margherita Woods and Jayne Anne Rex. 

STATEMENT OF HON. GERRY E. STUDDS, A U.S. REPRESENTA- 
TIVE FROM MASSACHUSETTS, AND CHAIRMAN, COMMITTEE 
ON MERCHANT MARINE AND FISHERIES 

Mr. Studds. The Full Committee will come to order. 

Let me make a couple of initial procedural observations, if I may. 
Because of the time constraints both on Members of the House 
with votes undoubtedly going to interrupt us and because of the 
need to conclude this hearing by 1:00 and because of time con- 
straints on our witnesses, one of whom must leave at 11:15, I am 
going to ask of the members to dispense with opening statements, 
much in the spirit with which we dispensed with one-minutes on 
the Floor today. Otherwise we will not have a prayer to get into 
the substance. 

I apologize to members but I think that is essential. I will dis- 
pense even with my written opening statement. 

Let me say to Secretary Babbitt, Administrator Browner and 
Ambassador Kantor, as you know, we are getting down to the last 
minute on probably one of the most important and certainly one of 
the most difficult votes that any of us will be asked to cast here 
in many years. I think it is safe to say that it is diffiicult not only 
because the substance and the merits are subject to honest debate 
and difference, but because the politics are unusually difficult. 

I don't think there is anybody in this room, regardless of party 
or philosophy, who does not have, not only political allies, but close 
personal friends on both sides of this issue. 

(1) 



All of us have been subject to importunings, to pleadings, to ar- 
guments, many of which have merit, practically all of which have 
some merit, and to emotional arguments on both sides. 

It is never easy, especially when dealing with one's closest 
friends, to distinguish between emotion and substantive argument 
while at the same time honoring and acknowledging that emotion. 
That is a challenge for all of us. 

Today we meet to look at one of the two most controversial com- 
ponents of this agreement, the side agreements on environmental 
matters. We have the three leading experts within the government 
to do their best to explain to us and to justify to us the ability of 
the United States to defend the sanctity of its own environment 
statutes, many of which are in the jurisdiction of, and vital to, this 
committee and to all of its members on both sides of the aisle. 

I welcome you three. I will turn to the distinguished Ranking 
Member, the gentleman from Texas. 

[The statement of Mr. Studds follows:] 

Statement of Hon. Gerry E. Studds, a U.S. Representative from 
Massachusetts, and Chairman, Committee on Merchant Marine and Fisheries 

In all the years during which I have represented the people of the 10th Congres- 
sional District of Massachusetts, I frankly cannot think of a more difficvilt vote than 
the one we will cast on the North American Free Trade Agreement (NAFTA) on No- 
vember 17th. The debate has been heated, the lobbying frantic, the rhetoric — on oc- 
casion — bordering on the vituperative. 

Lobbjdng on one side of the issue have been five U.S. Presidents, several Nobel 
prize-winning economists, and some of the largest environmental groups in the 
world (not to mention Lee lacocca). On the other side of the issue, we have other 
environmental and animal welfare organizations, Ralph Nader, Jesse Jackson, the 
AFL-CIO, and a brUionaire from Texas who claims to represent the "common folk". 
Is it any wonder that many of us are having a difficult time making a decision? 

In all this confusion, there can be little doubt that the world in which U.S. con- 
sumers and workers Uve is growing steadily smaller. Actions we take in this country 
today have the potential to reverberate almost immediately on the other side of the 
planet. Whether we like it or not, the American economy is now a global economy 
in which our workers must compete, and in which American jobs are created or de- 
stroyed by the relative success or failure of our export markets. The ways in which 
U.S. companies do business reflect the growing influence of international free trade 
principles — that, ideally, those who produce the best products at the cheapest prices 
are the winners. 

What we must ask is whether, in all this rush to embrace the principles of free 
trade, we are sacrificing any of the goals that some of us have dedicated our legisla- 
tive careers to achieving — in both the labor and environmental arenas. Today, before 
this Committee, we address the latter. 

Prior to the NAFTA debate, considering the environmental impacts of a trade 
agreement was as alien to trade negotiators as a winning baseball team is to Bos- 
ton. NAFTA has changed all that and — whether we agree or disagree with the final 
outcome — this Administration deserves congratulations for taking the first steps to 
forge a new environmental ethic for trade negotiations. And the environmental com- 
munity deserves our thanks for bringing important environmental and wildlife con- 
servation concerns to the forefront of the NAFTA debate. 

The cards are now pretty much on the table. The implementing legislation and 
an accompanying Statement of Administrative Action have been introduced. We 
have the general NAFTA text as well as two supplemental agreements to consider. 
The Administration has completed a Report on Environmental Issues. Our purpose 
today is to hear from informed parties on the environmental issues and to have our 
questions answered. It is my hope that we will all leave this room a little wiser and 
better prepared to cast our votes next week. 

I want to thank all our distinguished witnesses for coming here today, and I look 
forward to hearing their testimony. 



STATEME>rr OF HON. JACK FIELDS, A U.S. REPRESENTATIVE 

FROM TEXAS 

Mr. Fields. Thank you. I will try to be equally as brief. I want 
to welcome Secretary Babbitt, Ambassador Kantor and Adminis- 
trator Browner. 

I want to applaud you for calling this hearing today so that we 
can talk about some of the important aspects of this particular 
treaty. I don't believe that there is anyone who feels that the treaty 
is perfect^ but I think there are many, including myself, who recog- 
nize the benefits that this treaty holds as potential for this great 
country. 

Since this is the Merchant Marine Committee, we are certainly 
interested in maritime matters. I want to point out to the commit- 
tee and to the witnesses that it is an interesting fact that the Port 
of Houston is the largest seaport before Mexico. I think that just 
portends the potential that is there for other maritime areas or 
other maritime interests. 

Again, I want to applaud you for holding this hearing today. I 
would like to place the remainder of my remarks in the record. 

[The statement of Mr. Fields follows:] 

Statement of Hon. Jack Fields, a U.S. Representative from Texas, and 
Ranking Minority Member, Committee on Merchant Marine and Fisheries 

Mr. Chairman, I want to compliment you for holding this Full Committee hearing 
to examine the environmental implications of the North American Free Trade 
Agreement (NAFTA). 

Since the House wUl vote on this historic treaty one week from today, this hearing 
is extremely timely and I hope educational for those Members who have not yet de- 
cided how they will vote. 

As a Representative from Texas, I am an enthusiastic supporter of NAFTA be- 
cause it will create real economic opportunities for thousands of my State's constitu- 
ents. In 1991, Texas was the largest exporter to Mexico and Canada accounted for 
41 percent of ovu* State's totfd exports. Ninety-four percent of those exports were 
manufactured goods — and they supported an estimated 185,000 jobs. 

In 1989, merchandise exports from Texas to Mexico totalled $6 billion; last year, 
such exports totalled $16 bulion. 

If NAFTA is approved, our State is proiected to gain an additional 113,000 new 
jobs hy the year 2000 due to increased trade with Mexico. 

While it may sovmd unbelievable, the Port of Houston is Mexico's largest port; 
more Mexican cargo passes through the Port of Houston — 7.9 million tons last 
year — than through all ports in Mexico combined. 

The House of Itepresentatives should support NAFTA because it will mean a bet- 
ter life for millions of Americans, Mexicans, and Canadians now and for generations 
to come. 

Nevertheless, despite considerable economic benefits, there is a need to address 
the environmental issues in this trade a^eement. While historically trade agree- 
ments have not recognized the relationship between trade and environmental pro- 
tection, the supplemental environmental agreements are designed to resolve poten- 
tial conflicts involving the protection of wildlife and natural resources. 

While I believe NAFTA has done a good job of balancing the issues of economic 
development and environmental protection, it is important to ensure that this agree- 
ment does not conflict with the implementation of our environmental statutes. Our 
success in incorporating these environmental protections will, in all likelihood, have 
a profound impact on future trade negotiations. 

Mr. Chairman, I look forward to hearing from our distinguished witnesses as they 
discuss the fundamental goals of the NAFTA supplemental agreements and how 
they impact such laws as the Endangered Species Act, the Marine Mammal Protec- 
tion Act, the Magnuson Fishery Conservation Act, and the Clean Water Act of 1972. 

Mr. Studds. Without objection, and without objection the open- 
ing statements that have been prepared by all Members will ap- 
pear in the record. 



[The statements follow:] 

Statement of Hon. Don Young, a U.S. Representative from Alaska 

Mr. Chairman, with the bipartisan spirit that so often is found in this Committee, 
I wish I could say something nice about this issue. Unfortunately, I cannot. 

Next week we will be asked to vote on NAFTA. However, we won't vote on just 
a trade agreement — we will vote on a whole set of new labor and environmental 
agreements that cannot be changed by the Congress. 

What's worse, the President can't seem to tell us whether these agreements are 

good or bad. , /. »t a T-,m a 

On the other hand, we are told that they are an integral part of NAFTA— you 
have to vote for the whole package. On the other hand, we are told that the dispute 
settlement provision in the environmental agreement doesn't bind us to anything, 
that we can make our own laws as we see fit. 

If we can make our own laws, why can't we vote separately on the environmental 
side agreement? , , , . , j 

On the other hand, if the dispute settlement doesn't mean anything,why do we 
even have an environmental agreement? 

Further, I don't think anyone at the Trade Representative's Office can figure out 
what these things do. For example, 3 months ago I wrote to USTR asking about 
the effect of the environmental agreement on U.S. fisheries laws. One week ago, I 
finally got an answer. It said that fisheries management decisions are exempted to 
the extent they apply to the commercial harvest." 

What happens if the Council or the Secretary uses the Magnuson Act to make 
a decision on fisheries habitat, a proposal that is now under consideration by this 
Committee? Is the Magnuson Act no longer exempt? 

Mr. Chairman, in 1980, this Committee produced an oversight report on the U.b.- 
Canada fisheries treaty on East coast fisheries. If I remember correctly, you opposed 
that treaty because it was negotiated with no input from the affected people — New 
England fishermen.We have the same situation here today. We have a treaty with 
no input from fishermen, no input from those who may be affected, no input from 
those charged with making the laws. Your remarks on that fisheries treaty are 
equally valid for the NAFTA environmental agreement: "In this form, the treaty will 
not go." 

Thank you. 

Statement of Hon. William O. Lipinski, a U.S. Representative from Illinois, 
AND Chairman, Subcommittee on Merchant Marine 

I oppose the NAFTA for two simple reasons. It will cost American workers hun- 
dreds of thousands of jobs and it will not effectively protect the environment. 

In 1991, the average American manufacturing worker made $15.45 an hour while 
his Mexican counterpart made $2.17 an hour. Common sense suggests that this con- 
siderable wage disparity will give American companies an incentive to move their 
plants to Mexico. , ^^^ ^^^ , ,, 

The Mexican government projects 270,000 new jobs by 1995 and 600,000 by the 
end of the decade. The NAFTA will benefit multinational corporations by exploiting 
Mexican workers at the expense of American jobs. 

It is not surprising that NAFTA supporters are spending millions of dollars to fi- 
nance pro-NAFTA lobbying efforts. The Mexican government alone has spent $100 
million on its lobbying campaign, and American big business has spent millions 
more. These interests expect big returns at the expense of American workers and 
the environment. ■ u •• ^u 

The NAFTA will also create an environmental nightmare. There is nothing in tne 
NAFTA agreement requiring Mexico to strictly enforce its environmental laws. Al- 
though the NAFTA allows citizens to file complaints for inadequate enforcement, 
the lengthy process outlined in the proposal makes it unlikely that sanctions would 
ever be implemented. 

The NAFTA provides funding for environmental and infrastructure projects along 
the United States and Mexico border. However, the proposal does not consider the 
economic and environmental problems that industry will leave behind in other re- 
gions of the United States. Tl 1^ T^ 

I come from a region of the country often referred to as the Rust Belt. For years, 
industry moved from the region leaving environmental devastation behind. Recently 
the economy in this region has improved. However, I am concerned that economic 
and environmental decline will return and spread. 



Without a larger geographic scope, the financing initiative in the NAFTA is sim- 
ply localized economic development at the Nation's expense. 

Statement of Hon. Solomon P. Ortiz, a U.S. Representative from Texas, and 
Chairman, Subcommittee on Oceanography, Gulf of Mexico, and the Outer 
Continental Shelf 

I want to commend you for holding this hearing as the House of Representatives 
gears up to consider NAFTA next week. 

This hearing is going to cover a number of issues such as the effect of NAFTA 
on domestic environmental and wildlife laws, concern that a number of laws under 
the jurisdiction of this Committee may be impacted, and the impact of increased 
trans-border traffic on wildlife conservation efforts. 

I would specifically like to talk about the border environment and NAFTA. 

As a strong supporter of the trade agreement, I view it as a crucial step forward 
for our economy. Just as importantly, I also believe that NAFTA is essential if we 
are to both ensure the health and safety of those people who live along the U.S.- 
Mexico border and sustain and build on the number of important positive steps that 
both our nations have taken to protect the border environment. 

Mr. Chairman, my fellow Committee Members, I come from a border district. I 
grew up on the border as the son of migrant workers. 

I, as much as anyone, know what the border is like, the problems it has faced 
in the past, and the hope that NAFTA has brought to the region. 

I have seen the pollution along the border, the raw sewage dumped into the Rio 
Grande, the unexplained health problems and birth defects. 

But, just as importantly, I have seen great strides taken by both our nations in 
the past several years to recognize these problems, to find solutions, and to provide 
funding for rectifying them. 

Under the Integrated Border Plan issued last year, Mexico has committed $460 
million for border environmental protection and the government of Mexico expects 
to receive an additional $3 billion in loans fi-om the World Bank for border area in- 
frastructure such as roads and sewers. 

Additionally, Mexico's environmental ministry has increased its border budget by 
close to 500 percent and has increased the number of environmental inspectors by 
ten-fold. 

Similarly, this Congress last year appropriated close to $200 million for border 
colonias, sewage treatment faciUties, and border drinking water facilities. 

This year, Cfongress has appropriated $58 million for sewage treatment facilities, 
$25 million for water and waste water disposal grants for colonias, and $500 million 
for water infrastructure financing for hardship communities such as colonias. 

I commend both this Congress and this Administration, and President Salinas 
and his government for their commitment to the border environment and the health 
and safety of its people. 

The point I want to make is this: This attention to the problems of the border 
has happened not despite the prospect of a NAFTA, but because of NAFTA. 

For the fiirst time in a long, long time people are paying attention to the problems 
of South Texas and northern Mexico and elsewhere along the border, and have com- 
mitted the financial resources to do something about it. 

I truly believe that if a NAFTA was not on the horizon, none of this would have 
happened. For the first time, people have started caiing about the border. 

If we approve NAFTA and its supplemental environmental agreements, this at- 
tention and commitment to the border environment will be accelarated. Not only 
will we be able to continue to clean up the region, but we will also ensure that com- 
panies will not move to Mexico to escape environmental regulation and enforcement. 

The agreement obligates countries to effectively enforce their own environmental 
laws and mandates penalties or sanctions if they don't. 

It protects Federal, State, and local government environmental laws and stand- 
ards. 

The Border Environmental Cooperation Commission will help border states and 
communities arrange financing for environmental infrastructure projects. 

The North American Development Bank will provide some $2 billion in loans and 
guarantees for environmental infrastructure projects. 

These are just a few of the measvires that NAFTA will bring about. 

Most importantly, enacting a free trade agreement means a future of cooperation 
between our two nations. 

A future where an expanding Mexican economy will have more funds to dedicate 
for environmental protection and enforcement. 



A future where Mexico will develop as a major new market for the types of envi- 
romnental technologies and services that this Committee and this Congress have 
sought to promote. „ ^ , .u 

A future where we will be there to work with Mexico on all of these issues, rather 
than turning our back on them, and perpetuating the very problems that we all 
hope to rectify. ^ j u i. 

I hope that my colleagues will remember my words when we come to debate 
NAFTA next week. Thank you. 



Statement of Hon. Gene Green, a U.S. Representative from Texas 

Mr. Chairman, I want to thank you for holding this very important hearing. This 
issue has been one of the most difficult issues that have come before me in my 20 
years as a legislator, that is why I am one of the undecided Members of Congress 
on the North American Free Trade Agreement. 

I have always been a supporter of free trade, however I have some strong con- 
cerns regarding the environment. Cleaning up the U.S.-Mexico borders is vital to 
this agreement. We must ensure that NAFTA has a secure source of adequate funds 
to address the full scope of environmental problems on the U.S.-Mexico borders, 
such as cleaning toxic waste sites and reducing air pollution. , • ,, 

I am also concerned about the form of funding, which is the "Bonding Authonty. 
It is my understanding that this is essentially having permission to borrow money. 
My concern is that these border communities are too poor to pay off such bonds. 
My question is what happens then, who pays? If the money is not there is this part 
of the supplemental agreement ignored? 

I urge Members to look at these issues closely before embracing this agreement. 
I look forward to hearing testimony from our witnesses before us today. Thank you. 

Mr. Studds. As you all know, we normally confine quite strictly 
our witnesses to no more than five minutes in their oral presen- 
tation. Given the importance of this, we will not be that strict in 
imposing it on the three of you. But we will be quite strict in en- 
forcing it upon ourselves when we come to questions. 

I am going to ask members to confine themselves basically to one 
question and certainly to no more than five minutes in the re- 
sponse. 

We will begin with Ambassador Kantor, the United States Trade 
Representative. 

Welcome, Mr. Ambassador. 

STATEMENT OF AMBASSADOR MICHAEL KANTOR, U.S. TRADE 

REPRESENTATIVE 

Ambassador Kantor. Thank you, Mr. Chairman. 

With your permission and that of the Ranking Member and the 
full committee I would like to submit my full testimony for the 
record. 

Mr. Studds. Without objection. 

Ambassador Kantor. I will try to remain within your five 
minute admonition, although you were gracious enough to say we 
could go longer, because we know there will be questions and we 
want to get to those questions. >t * -r^m a 

I would like to make some broad statements about the NAFTA 
itself which I think are important and go beyond just the jurisdic- 
tion of this committee, and then I will be happy to talk about the 
environmental and standards considerations of the side agreements 
and many other aspects that I know you and the committee are 
deeply concerned about. 

Let me make two statements that might surprise some of you, 
but I think need to be made. There is too much hyperbole, too 



much misleading information, frankly, on all sides of this very emo- 
tional debate. 

Mr. Chairman, you could not have been more correct about the 
difficulty of this vote. But I think once you analyze the facts, truly 
analyze them as they really are, I don't think there is any way to 
come down except in favor of this treaty. 

First of all, NAFTA will not solve all our economic problems. It 
will not do it. In combination with the President's economic pro- 
gram, in combination with a successful Uruguay Round, in com- 
bination with building a trade investment framework in Asia, and 
in combination with believing in the American people— that they 
can compete and win again, which is the essence of this treaty — 
we can make large strides. But let me just say that NAFTA stand- 
ing alone will not solve all our economic problems. 

Two, it will not solve all our problems with Mexico. So as we en- 
gage in inflated rhetoric and heated discussion and too much hy- 
perbole, let's understand that at least this administration is trying 
to just deal with the facts. We apologize ahead of time if we get 
a little bit excited about something we care so deeply about. 

In the last 60 years the United States has been faced with three 
great challenges: One after the First World War; we did not meet 
the challenge. Rather than opening our markets and expanding 
trade and building global growth, we passed the Smoot-Hawley bill 
and, of course, threw the world into a great depression. 

After the Second World War, our parents literally met the chal- 
lenge. They met the challenge with the General Agreement on Tar- 
iffs and Trade and the Bretton Woods Conference. They met the 
challenge with NATO. They met the challenge with the Marshall 
Plan. 

What we did is grow the economies not only of this country but 
the whole world. President Kennedy met the challenge with the 
Kennedy Round which led to 100 months of expansion, which all 
of you know, was the greatest and lengthiest expansion in Amer- 
ican history. 

We are faced with the same kind of challenge today. It is not to 
say that the NAFTA standing alone will make the difference, but 
in concert with other things that we can do provided we are suc- 
cessful with the NAFTA, it is the third great challenge of this cen- 
tury. 

First of all, the NAFTA does four simple things, Mr. Chairman. 
One, it builds the world's largest market, 370 million people and 
$6.5 trillion in gross products. That means more exports, more jobs, 
and a better ability to compete with the Japanese and with the Eu- 
ropeans. 

It literally creates this huge market for our products. We are the 
most productive workers in the world today. Our problem is not 
productivity or being competitive. Our problem is building markets. 
This is what NAFTA does. 

Two, it makes us more competitive, as I said, and that is an im- 
portant aspect of what we are doing here. Just one example: the 
President had a products fair. I talked to nine companies ranging 
in everything from dealing in specialty steel to x-ray machines, in- 
cluding AST Computer in Orange County, California. 

I said, who is your biggest competitor in Mexico? 



8 

Nine for nine, Mr. Chairman, "the Japanese." 

I said, what will happen if the NAFTA passes? 

They said, well, we will have no tariff barriers or taxes on our 
products. We will have no unfair rules or non-tariff barriers. 

The Japanese and Europeans will still face the same impedi- 
ments in this 92 million person market which is the fastest grow- 
ing market we have today in the second fastest growing economic 
region in the world, which is Latin America, and we will dominate 
those markets and grow more jobs in this country. That is industry 
talking. That is the real world. 

That is not studies. That is not academic thought or theory or 
promise. That is the real world. 

Three, it ends the unfair rules. What I don't understand about 
the opponents of NAFTA is why they want to keep the rules unfair 
to American workers. Why do they want to hurt our workers? Why 
don't they believe in what our workers can do? 

Let me tell you about these rules. One, Mexico's tariffs are 2.5 
times U.S. tariffs. 

Number two, they have production standards, performance 
standards, trade balancing standards, import licensing standards. 
That keeps our products out of Mexico and forces American compa- 
nies to move to Mexico in order to take advantage of that market. 

Three, it gets rid of the tragedy of the maquiladora program, im- 
plemented in 1965 by Mexico with our help. What does that pro- 
gram do? It says to American businesses: "Come on down, we will 
give you trade preferences, bring your component parts in for free, 
send your products back into the United States for free; have an 
advantage over your competitors and then spoil the environment 
without paying any price for it." That is a tragedy. It has to end. 
NAFTA ends the maquiladora program. 

Mr. Perot last night, who was knocked out on the first round — 
they would have stopped it had it been a prize fight— Mr. Perot 
last night said that the NAFTA is the maquiladora program. He 
could not be more wrong. He is like the chairman of the board of 
the Madhatter's tea party. 

What is happening here, Mr. Chairman, is we are looking at the 
future through a rearview mirror. The future is we get rid of that 
program, companies in the maquiladora section have no more trade 
preferences. We can send products out and not jobs. 

Last but not least, it locks in the gains we have made in the last 
five years as President Salinas has unilaterally lowered just a little 
bit the tariff and non-tariff barriers. Let me tell you what has hap- 
pened. Our exports have gone up 3.5 times, from $12 billion to 
$40.6 billion. 

Somebody will say, wait, that is component parts. Component 
parts were only $7 billion of that; $4 billion of those were auto 
parts. We are going to send all our auto parts now from the United 
States, $2 billion more in auto parts and autos next year because 
of the NAFTA. So what we are looking at is about 90 percent of 
what we are sending; 83 percent by actual count of all our gains 
up to that $40 billion, Mr. Chairman, are consumed in Mexico. 

Now, we do one more very simple thing. We lock in those gains. 
We lock in the 444,000 jobs we have created. We have 700,000 jobs 
in this country strictly related to exports to Mexico. With NAFTA 



in the next two years, it will go to almost 200,000 more. It is 
717,000 today. 

We are going to do two other things that are critical: One is we 
have the first trade agreement in history with an environmental 
side agreement that induces Mexico to enforce its environment 
laws. This has never happened before in trade history. 

Is it perfect? No. 

Is it a giant step forward? 

Yes, Mr. Chairman, it is a giant step forward. 

In the labor areas, it is the same thing. A workers right agree- 
ment has a dispute settlement process for minimum wage, child 
labor, and health and safety enforcement, and, something nobody 
wants to talk about, we preserved our Section 301, our trade rules, 
which can provide trade sanctions. If, in fact, Mexican laws regard- 
ing freedom of association and the right to strike and collective bar- 
gaining are not enforced, we can use Section 301 to bring trade 
sanctions against Mexico. 

So what we have done here, Mr. Chairman, is four simple things, 
but I think they are somewhat profound in what they accomplish. 
They lock in our gains. They grow jobs in this country. They open 
up the second largest economic growing market in the world to 
U.S. products. 

One more point and then I will let my colleagues wax eloquent 
as they can do much better than I. 

We are about to go to the Asian Pacific Economic Cooperation 
Forum on the 18th of the month, one day after the House vote. 

The President is meeting with 14 Asian leaders. We are trying 
to build a trade and investment framework around an area, mean- 
ing the Asian Pacific area, which is 40 percent of our trade, the 
biggest trade area we have in the world. 

We need to protect intellectual property and investment in that 
area. We need to open up their markets. We need to make sure we 
begin to deal effectively with those huge trade deficits we have in 
Asia: $49 billion in Japan, $19 biUion in China, $9 billion in Tai- 
wan. 

Don't send the President to that meeting when we have rejected 
for our own hemisphere, exactly what we are asking the Asian 
community to do with us in a larger area. 

Two, two days after that conference we should begin to finish the 
Uruguay Round finally after seven-and-a-half years. We cannot end 
that round on a successful note without NAFTA. I will explain 
why. 

For years our rhetoric to our partners around the world has 
been, open your market, expand trade, don't keep our products out. 
Don't use the U.S. as your vehicle for selling your products without 
having comparable action on your part. We are enforcing that in 
this administration. 

How in the world can we sit there with credibility and say two 
or three things to our partners? One, we really do mean to open 
the market, we just won't do it in our own hemisphere? 

Two, the clout that we will have with building the world's largest 
market will be gone, gone because we will not have done the 
NAFTA. 



10 

Number three, Mr. Chairman, how can I as your representative, 
because international trade is a province of the Congress of the 
United States and I also work for this President and I work for the 
American people, how can I say with credibility to anyone around 
that table in Geneva with 110 nations, trust us, we will get the 
Uruguay Round through the Congress, don't worry about the 
NAFTA? We didn't do it in our hemisphere but trust us, we will 
do it with this world agreement? 

Mr. Chairman, this is a more than serious issue. Opening up 
Latin America, not discouraging those market economies and grow- 
ing democracies, finishing the Uruguay Round, building a trade in- 
vestment framework in Asia, connected with the President's pro- 
gram of lowering the deficit, keeping interest rates down, investing 
in our people again, growing private capital for growth and protect- 
ing the environment as we do in this treaty are critical. 

I appreciate everything this committee has done. We look for- 
ward to working with you in every other trade treaty. 

The last thought I want to leave you with is this: How can we 
ever argue with credibility to put this kind of environmental agree- 
ment on other trade treaties if we reject it in this treaty? 

This is precedent-shattering. Please don't do that. Allow us to 
take this treaty and this environmental side agreement and make 
it better in the next treaty to protect the environment, grow our 
economy, lead global growth, and meet all the rhetoric of the last 
60 years that the United States will really take leadership. 

Thank you very much. 

[The statement of Ambassador Kantor may be found at end of 
hearing.] 

Mr. Studds. Thank you very much, Mr. Ambassador, for a com- 
pelling presentation. 

Next, a good friend of this committee, Secretary of the Interior, 
Secretary Babbitt. Welcome. 

STATEMENT OF THE HONORABLE BRUCE BABBITT, 
SECRETARY, DEPARTMENT OF THE INTERIOR 

Secretary Babbitt. Mr. Chairman, and committee members, I ap- 
preciate the opportunity to come here. Like Ambassador Kantor, I 
think I should start by just telling you a word or two about my re- 
lationship to this issue and elucidate for you, if I can, the source 
of my commitment and my sense of intensity about the importance 
of this moment in the history of both Mexico and the United 
States. 

My involvement with this issue, both economic and environment, 
goes clear back to the mid-1970's when I first became a State offi- 
cial in Arizona. I have dealt with both the environmental and eco- 
nomic issues at close range under three Mexican Presidents begin- 
ning with Lopez Portillo and through President Dela Madrid and 
now through the presidency of Carlos Salinas, who I first began 
working with personally back when he was Planning and Project 
Minister in the cabinet of President Dela Madrid. 

The importance of this I think can be best understood by just a 
few words about the changes that have taken place over that time 
within Mexico and in the context of our relationship with Mexico. 



11 

I think there have been farsighted leaders in both countries who 
have always understood the reality, and that is that the wildlife 
and conservation and park and natural environmental issues in the 
two countries are inextricably intertwined. 

I think those of us who have responsibilities in these areas in 
both countries have always recognized specific examples that illus- 
trate the interdependence of just a few of them. 

Migratory waterfowl; every single person in this country who 
hunts or watches or otherwise appreciates migratory waterfowl is 
aware of the tri-national, indeed hemispheric, relationship affecting 
those migratory birds. 

Others may not be aware that every single monarch butterfly 
that you see on a milkweed plant in the summer of the United 
States east of the Continental Divide migrates from the state of 
Durango, where they hibernate in the winter in one small tract of 
land in the Sierra Madras. 

The great whales on the Pacific coast of the United States mi- 
grate to and winter in the Pacific seas off Baja, California. 

The song birds in central Texas which have been a large issue 
in Austin and Travis County all migrate each winter to the western 
mountains of the states of Coreacon and Michoacan. Notwithstand- 
ing those obvious relationships and this inter-dependence, we have 
traditionally not had a lot of interaction with Mexico in the more 
close-up kind of sense. The reasons are twofold: 

First, there used to be a lot of empty space between Mexico and 
the United States. The southwest, as much as I hate to admit it, 
was sort of a remote, underdeveloped provincial hinterland. The 
north of Mexico as seen from the center of that country was much 
the same. That is obviously beginning to change at a dynamic and 
dramatic rate. 

Second, when I first began going to Mexico to deal with these is- 
sues in the 1970's, I began to learn a lot about Mexican culture and 
history. I saw firsthand as a public official the way in which the 
legacy of the Mexican revolution hindered our cooperation among 
our two countries because in the wake of that revolution Mexico 
self-consciously selected to distance itself from the United States. 
It positioned itself in opposition to American economics, American 
culture and American tradition. 

A ritual had developed in which Mexican politicians, as a part 
of that cultural tradition, went to great pains to be extraordinarily 
correct with ceremony, with protocol, with the extraordinary hospi- 
tality of the Mexican culture. But they were equally insistent upon 
maintaining distance. 

There was a kind of duality of Mexicans and their culture as 
Octavio Paz writes so eloquently about. They are capable of wear- 
ing masks and behind the masks of protocol and ceremony, there 
was an implicit anti-Americanism, a distancing. It said even as we 
treat you like a honored guest, we want you to know that we are 
not interested in compromising our sovereignty by talking about co- 
operative efforts. 

In the cultural and deeper political sense it was like crossing 
kind of a cactus curtain, if you will. The message was, we are not 
really interested in cooperation. We don't see that it is necessary 



12 

and cooperation is an implicit assault on our sovereignty which has 
been the defining characteristic in opposition to the United States. 
There has been an extraordinary change with the accession of 
Carlos Salinas to the Mexican presidency. You have seen it in 
many, many ways in the economy, the dismantling of tariff bar- 
riers, the movement to a market economy, the dismantling of the 
import substitution economy and the way in which the President 
has said successfully to the Mexican people, our future lies not in 
opposition to the United States but in cooperation. 

Now what is not so obvious is the way in which that profound 
historic cultural/political change has also brought about environ- 
mental change, the way in which the economic opening has been 
paralleled by an extraordinary flowering of environmental coopera- 
tion. 

I would to leave you with one very brief example. I was m So- 
nora in the first week in June when the President came to a little 
town called Puerto Penyasco to dedicate a biosphere reserve of sev- 
eral million acres right on the Arizona-California border. 

I sat on a little makeshift platform out in the middle of the 
desert wilderness and listened to the President of Mexico with pas- 
sion talking to an audience of local people, explaining to them the 
importance of this for future generations, explaining why it is that 
the northern reaches of the Gulf of California had to be put off lim- 
its to protect an endangered porpoise called the vaquita and an en- 
dangered fish called the totoaba and explaining it with a passion 
that I have scarcely ever seen from a public official, in either the 
United States or Mexico. 

After that ceremony, as the sun began to set, I walked with the 
President through the streets of the town down to the pier where 
he gathered an angry group of several hundred fishermen and ex- 
plained to them why it is that it was necessary for them to accept 
these restrictions which were going to impose some hardship on 
them and why it had to be done for the good of Mexico, the future 
of the Mexican people and in the cause of cooperation in the United 
States 

I tell you that because that is the spirit that this economic open- 
ing has generated. We see it in our day-to-day work along the en- 
tire border. There is a 2,000 mile border out there and the agencies 
I have jurisdiction over, Fish and Wildlife Service, Bureau of In- 
dian Affairs, the National Park Service, the Bureau of Land Man- 
agement, are the major landlords along that border. 

In San Diego and in California, we are now working on joint 
management plans to relate Kavasa Prieta and the Organ Pipe Na- 
tional Monument to the Penacotay Reserve that I have just de- 
scribed. 

Going east along the San Pedro River in Arizona, the Bureau of 
Land Management has established one of the great desert con- 
servation areas of this continent. They are now working with the 
Mexicans across in Sonora to have a complimentary plan for the 
headwaters of the San Pedro River, which originates in the high- 
lands of northern Mexico. 

The Mexicans understand and appreciate that our plans for the 
San Pedro are meaningless unless we have a collective effort to 
preserve the headwaters which originate in Mexico's efforts. Going 



13 

further east, just selecting arbitrarily in Texas the Big Bend Na- 
tional Park has a mirror image of perhaps even greater variety and 
beauty across the Rio Grande at a place called Sierra del Carmen. 

For years there has been talk about the possibilities of a large 
integrated binational area. But it was just talk because of the cul- 
tural matters that I have discussed with you. It was not possible 
to proceed from talk to action. 

Secretary Colosio is now engaged with us in an active plan to 
fmd the commonalities, to do the inventories and to make that 
park a reality. It is not a park on just one side. A park on one side 
cannot survive. We have to have both sides, both countries, a com- 
mitment on both sides. 

That process is now proceeding down the Rio Grande where we 
have an enormous prospect for a sort of bottomland waterway or 
wildlife refuge that would extend through the lower part of Texas 
clear down to Matamores and Brownsville. 

Beyond just the border issues that I have direct jurisdiction over, 
I would like to close with a comment about some of the broader 
conservation issues that we have been working on. 

It is not generally appreciated that under the Western Hemi- 
sphere Convention, to which Mexico is a signatory, we have a 
large, broad, wide-ranging program of training Mexican park rang- 
ers, of working on conservation plans involving the sea tortoises, 
marine mammals, the forests in the south of Mexico, the areas 
along the Sierra Madras. The level of cooperation has really been 
remarkable. I know there will be some questions about the inter- 
national aspects of treaties and conventions and commitments. 

I will leave you with one illustration: the most important of all 
of the international wildlife treaties is a convention called the 
CITES convention. It is not just Mexico. It is international treaty. 
It is the strongest, most dynamic, the best, perhaps in the short- 
term, the only hope we have of managing the trade in international 
wildlife and the elicit demand for African game animals, the rhino 
horn trade, the tiger trade, the extinction of Asian tigers or the 
parrot trade that comes through South and Central America. 

The important thing about Mexico in the CITES is that the vot- 
ing arrangements internationally in CITES are broken down by 
continents. That means the North American position in the CITES 
convention is interestingly and kind of paradoxically, if you will, or 
at least foreshadowing NAFTA, up to three votes, Canada, United 
States and Mexico. 

I can tell you from my personal experience that Mexico has been 
our strongest ally in CITES debates in Brussels this past year as 
we have moved to enforce an American law known as the Pelly 
amendment to stop destructive trade in particularly tigers and 
rhinos. 

The importance of that Mexican support is this: through the 
CITES convention, we have been able to maintain international 
support for unilateral American enforcement under the Pelly 
amendment. It is a very important thing. There is this perception 
that somehow Mexico can challenge American environmental laws. 

In the context of CITES, they have done exactly the opposite. 
They have been the strongest ally in world councils for sanctions 



14 

which involve the use of American laws in aid of international reso- 
lutions adopted through the CITES. 

What does that all add up to? It adds up to this: I think it is 
important to have a discussion about the technical details of this 
environmental cooperation mechanism that Ms. Browner is going 
to talk about. But I have to tell you this: You can line up 1,000 
lawyers and circle them around her and take Mr. Kantor's job and 
move him to the court system and litigate from now to the end of 
the world, but the bottom line is, it is not nearly as important as 
the quality of the commitment, and the quality of the commitment 
is tied to the cultural and economic and political convergence be- 
tween our countries and the ability to raise these issues and talk 
about them and have a forum in which to do it and have trans- 
parency, the ability for discussion, work between NGOs on both 
sides and the benefits from the convergence. 

If this convergence doesn't continue, we can talk forever about 
treaties, about laws, about litigation and GATT challenges but in- 
evitably we will be talking, echoing across that cultural distance 
that I described as the Mexican tradition and the tradition in our 
relationships. 

So it is in that context that I say to you with as much conviction 
as I possibly can, this is an opportunity for wildlife conservation, 
for parks, for biodiversity that we may never have again in my life- 
time. It depends upon the ratification of this treaty. 

Thank you. 

[The statement of Secretary Babbitt may be found at end of hear- 
ing.] 

Mr, Studds. Thank you very much, Mr. Secretary. I think we 
may dispense forever with any written testimony. We have no need 
for it after the last two extraordinary presentations. 

Someone just pointed out to me this morning's New York Times 
has a list of those members of the House who are undecided on this 
matter. Thirteen of those undecided members are members of this 
committee, just in case you didn't think this was a moment of sig- 
nificance. 

I now call upon the distinguished Administrator of the EPA 
agency who hopefully soon will have an easier-to-pronounce title. 
Administrator Browner. Secretary is so much easier. 

STATEMENT OF THE HONORABLE CAROL M. BROWNER, 
ADMINISTRATOR, ENVIRONMENTAL PROTECTION AGENCY 

Ms. Browner. Thank you, Mr. Chairman, and thank you for the 
support on this issue. 

Ambassador Kantor and I said perhaps we should recess and call 
the President and bring him over to talk to the 13 undecided. He 
would probably be more persuasive than the three of us, but we 
will give it our best shot to explain these very difficult issues that 
this committee is seeking to understand. 

It is always a pleasure to be with my colleagues from the Cabi- 
net, Secretary Babbitt and Ambassador Kantor. We have all, I 
think, enjoyed working together to deal with the significant envi- 
ronmental issues that we face across this continent and to develop 
solutions to those problems. 



15 

The Environmental Protection Agency, my agency, played a very 
significant role in both the negotiation on NAFTA and on the envi- 
ronmental side agreement. It is something that we have been in- 
volved in since I came to the agency in January. We also have a 
long history of working with Mexico under the La Paz agreement 
on environmental matters. 

I was in Mexico just two weeks ago when we signed in Ensenada 
this year's very specific work plan covering things like hazardous 
waste, pollution prevention, enforcement of air and water issues, 
projects that we will undertake jointly in the United States and 
Mexico to deal with real environmental problems, to develop solu- 
tions that will result in clean air and clean water. 

I believe that it is absolutely clear that with NAFTA, environ- 
ment protection will improve throughout the continent; and that 
without NAFTA, we will lose an opportunity to inaugurate a new 
era of environmental protection. 

I have seven points I want to make about NAFTA and the envi- 
ronmental side agreement. 

First, the NAFTA package promotes cooperation between the 
countries in dealing with these problems. Environmental problems, 
pollution, does not recognize political boundaries. If we are going 
to solve these problems, it will be by working together, 

NAFTA and the side agreement establish an innovative tri-na- 
tional Commission for Environmental Cooperation. The three envi- 
ronment ministers, myself on behalf of the United States, my coun- 
terpart from Mexico, the head of SEDESOL, and from Environment 
Canada, will work on issues like pollution prevention, using natu- 
ral resources sensibly, region-wide planning, what do we do first 
and then second, specific work plans for solving these problems. 

Two, NAFTA will improve enforcement of environmental laws. It 
will make it harder to pollute in all three countries. 

Three, NAFTA gives us an opportunity to deal with the very 
pressing problems facing American citizens who live along the 
U.S. -Mexico border. 

Last March, Mr. Chairman, I had the opportunity to travel to the 
border. I met there with a woman, an Ajnerican citizen who lives 
along the border we share with Mexico. She told me that she is no 
longer able to work because she spends her day hauling water for 
her children to drink and garbage to the landfill. There is no safe 
water in her tap. There is no garbage pickup. 

Then she told me about her neighbor who doesn't have the time 
to take their garbage to the landfill and rather bums it in their 
front yard with raw sewage because they don't even have a septic 
tank. The conditions American citizens live in along that border are 
awful. 

It is about basic health and human services. NAFTA gives us an 
opportunity in a comprehensive manner to work with the Mexican 
government to build the infrastructure, to provide people with 
clean water, sewage systems, with garbage pickup. 

NAFTA and the side agreement also embrace public participa- 
tion. I know, Mr. Chairman, for you and the members of this com- 
mittee this has been a very important issue. The agreement con- 
tains a number of opportunities for public participation. 



16 

First of all, the Commission for Environmental Cooperation is 
made up of three components. There is real opportunity for public 
involvement. The Council of Environmental Ministers, myself, 
SEDESOL, Environment Canada will conduct its business in the 
public. 

Secondly, the Commission will have the benefit of a joint public 
advisory committee, citizens, real people working together to deal 
with these issues. 

Third, any citizen of the United States, of Canada or Mexico has 
the right to come before the Commission and say that one of the 
countries is persistently failing to enforce its environmental laws. 
Never before have citizens been given access to the process of trade 
issues in quite the same way that we have been able to achieve 
with the side agreement we negotiated. 

There will be other opportunities for public participation for 
transparency. I, as a member of the Commission, am fully commit- 
ted to doing ever3rthing I can to ensure that there is access to infor- 
mation, that all non-confidential reports are made public, that fac- 
tual records are made public and that decisions are made public. 

I believe that when it is all said and done you will see far greater 
transparency, far greater public participation than ever before seen 
in matters of this kind. 

Five, NAFTA fully preserves the sovereign right of the United 
States, our States and our local governments to determine their 
own levels of environmental protection. My responsibility as the 
head of the Environmental Protection Agency is to look across the 
United States as a whole and to deal with the differences, the inev- 
itable differences that exist from Maine to Florida to California, 
Alaska, Louisiana and to put forth rules and regulations to protect 
the health of our citizens, to protect the health of our natural re- 
sources. 

But there will be times when States, because of the unique qual- 
ity of their resources, have problems they face, the economic situa- 
tion they find themselves in, when they will act in a way beyond 
what the Federal Government is capable of doing. We must pre- 
serve the right of States and local governments to make those deci- 
sions. This agreement protects those rights. 

It will allow States and local governments across this country to 
continue to deal with the environmental public health issues that 
are more important to them. 

Number six, NAFTA will create jobs. I want to speak about an 
industry that we work with where we have already seen evidence 
of job creation. That is the environmental technology industry. The 
world market for environmental technology today is $200 billion. It 
will grow to $300 billion by the end of the decade. 

The United States is not number one in exports of environmental 
technology. Today Germany and Japan surpass us. Yet we are 
number one in creating the new solutions and developing the new 
technologies and we should be number one in exporting that Amer- 
ican know-how around the world. 

With NAFTA, the Mexican demand for environmental tech- 
nologies equipment and services will grow. Conservatively esti- 
mated at $1.1 billion in 1992, it is expected to grow between 15 and 
20 percent in 1993, 1994. 



17 

Several weeks ago we met with about 100 environmental tech 
firms fi-om across the United States. It was like a revival, Mr. 
Chairman, as each of them stood up and said with NAFTA I will 
be able to employ more people because there is going to be a great- 
er demand for the technology I have developed or the technology 
I can build. Along the border as we seek to build that infrastruc- 
ture, we will look to American companies for the know-how, for the 
engineering skills, for the structures that will have to be put in 
place to solve these problems. 

Seven, NAFTA provides mechanisms for integrating trade and 
environmental objectives. Never before, and as Ambassador Kantor 
testified, have you seen an integration of these issues in a trade 
agreement. The Commission for Environmental Cooperation has a 
mandate to prevent or resolve environmental-related trade dis- 
putes. This means that potential trade disputes with environ- 
mental ramifications can be discussed and considered by environ- 
mental officials at an early stage in the process. 

Secondly, the Council of Environmental Ministers will embark on 
a work program to address a broad range of environmental issues 
in a new North American context, issues like pollution prevention 
techniques and strategies, trans-boundary air and marine pollut- 
ants, and approaches to environmental compliance and enforce- 
ment. The agreement sets out 18 different issues that the Council 
can look at. 

A work program item of particular interest to this committee and 
to me is the consideration of the environmental implications of 
goods throughout their life cycles. This captures the process and 
production methods, or PPM, issue that you may have heard about. 

It is my intention as a member of the Council to work hard, to 
see that this issue is one of the first priorities that the Council un- 
dertakes to address. I know that this has been an exceptionally 
complex and sensitive issue. It has been the subject of extensive 
discussions in GATT, the OECD and elsewhere, also. It is one that 
is likely to take time to resolve. 

I think we all recognize that the United States has not had many 
international allies in its support of PPM-based trade measures 
and that if change is to occur, it will have to occur in a form that 
is more sjrmpathetic to environmental priorities than the form we 
currently have available. I think we could all agree that the Com- 
mission for Environmental Cooperation is a very proniising forum 
for discussing this issue and it could well be a cutting edge forum 
for resolution of this issue. 

So we commit, the United States will make sure that this is one 
of the first undertakings of the Council. 

In conclusion, Mr. Chairman, I think it is very important for the 
members of this committee to understand that NAFTA does not 
create environmental problems. In fact, NAFTA solves many prob- 
lems. 

For those problems that perhaps it does not solve completely, it 
certainly creates the opportunity for solving them. I fundamentally 
believe whether it be problems we are dealing with here in the 
United States or with our neighbors to the south, that cooperation 
is the best solution for dealing with and solving these environ- 
mental problems. 



18 

I wanted to tell about my meeting with President Salinas and his 
country's commitment to environmental protection. I met with him 
in March and he spoke about his passion to the environment and 
then I spoke about why I have committed my life to this work. 

He asked me, do you have a child? 

I said I have a son who is five years old. 

He said that is why you do this work; it is the morally right 
thing to do. 

NAFTA is about taking us forward, it is about working in co- 
operation with our neighbors to solve problems. It is about giving 
our children a better future. 

Thank you for the opportunity to be here today. 

[The statement of Ms. Browner may be found at end of hearing.] 

Chairman Studds. Thank you very much, Ms. Browner. 

Let me observe that I think regardless of one's position on this, 
that is some of the most compelling individual testimony we have 
heard here in some time. I express my appreciation to all three of 
you. 

We anticipate a vote on the Floor momentarily. It is the inten- 
tion of the Chair to continue without interruption. We will not 
break for the vote. Members may come and go but the hearing will 
continue. 

That is obviously because of the constraints on time both of the 
witnesses and its members this morning. We will do our best under 
the confusing circumstances of coming and going to recognize ac- 
cording to our normal procedure, order of appearance. 

We will have a little confusion. I apologize in advance, but we 
will do the best we can to be fair. 

I understand Ambassador Kantor must leave at 11:15. 

We will ask each member to confine themselves to questions of 
no more than five minutes. If some have questions directed to Mr. 
Kantor, let me know so you can get your question while he is still 
here. 

Let me begin, if I may, and this is not directed at any one of you 
in particular; you can handle it as you wish. Those who have seri- 
ous reservations about NAFTA and for whom those reservations 
center on environmental considerations have, as I understand it, at 
the core of their concerns the fear that somehow the most fun- 
damental environmental statutes of this country would be rendered 
vulnerable by our adherence to NAFTA, whether that be the Ma- 
rine Mammal Protection Act, where a lot of people think about the 
tuna/dolphin controversy; the Driftnet Act; or the Wild Bird Protec- 
tion Act. 

Whatever it may be, of all the statutes for which this committee 
in particular holds responsibility, there is, I think, something be- 
tween a concern and a fear as to whether or not the ability of the 
United States to exercise the fullness of its sovereignty with re- 
spect to those statutes would be in any way impaired by our adher- 
ing to this treaty. 

We have seen such a challenge previously, in the GATT. Can any 
of you respond to that most fundamental concern? 

Secretary Babbitt. Mr. Chairman you raised tuna/dolphin, and 
I think it is a perfect example of the transition that is taking place 
here. The GATT challenge to the American tuna/dolphin position 



19 

was mounted by the old guard, the old Mexico that I told you about 
that says that rather than cooperate, challenge in the name of sov- 
ereignty. 

The remarkable thing about that is having won the victory, Mex- 
ico acceded and set it aside without any more comment in favor of 
cooperation, a process which now is going on through the National 
Oceanic and Atmospheric Administration in the Department of 
Commerce. 

That is to me a metaphor for what this is all about. American 
laws remain subject to challenge in the GATT tribunals. 

Ambassador Kantor will be dealing with that in due course. 

The NAFTA is in a large sense the solution to these issues be- 
cause the linkage of all of these issues and this growing pattern of 
cooperation inevitably drives Mexico into a cooperative mode as we 
have seen with the tuna/dolphin. 

Ambassador Kantor. Very quickly, Mr. Chairman, the provisions 
of the NAFTA ensure that we can maintain and enforce our exist- 
ing Federal and State health safety and environmental standards. 
Specifically, NAFTA affirms the right of each party to choose the 
level of protection of human, animal or plant life it considers appro- 
priate. It maintains existing U.S. Federal safety and environmental 
standards. 

There is no doubt about this issue. That right has been preserved 
and it will be protected both in terms of our sovereignty and in 
terms of the importance of these laws. We did it on purpose. We 
did it specifically. It was discussed in the negotiations and all three 
countries have agreed. 

Ms. Browner. The only thing I would add, Mr. Chairman, is 
that the Council that is created under the Commission does have 
an opportunity, and I believe a responsibility, to create a forum for 
discussion and cooperation on these issues. 

As Secretary Babbitt said, we are already seeing progress with 
Mexico because of the cooperation; the Council provides a public 
forum for enhanced cooperation. I believed it could well be the 
place where we finally see these issues resolved because you have 
on the Council people who come to these issues with the environ- 
mental perspective. That is not something you have had previously 
in dealing with these PPM issues. 

You have not had people whose first and primary concern is envi- 
ronment and public health protection, but rather they have come 
at it from the trade perspective. I think this is a significant step 
forward in our efforts to deal with these issues and to work with 
Mexico. 

Chairman Studds. Thank you. The gentleman from Texas. 

Mr. Fields. Thank you. Thank you, Mr. Chairman. 

Ambassador Kantor, this is the third time I have heard you 
speak on this particular agreement. I must say, you get better each 
time. 

If this effort is successful, I think in large measure it will be due 
to your efforts. I want to applaud you. 

I agreed with what you said about the debate last night. I 
thought Vice President Gore was excellent in providing the facts. 
Mr. Perot said in the debate that we are dealing with people who 
can't buy our products. 



20 

I remember in our Telecommunication Subcommittee hearing 
you talk about the development and the modernization of the Mexi- 
can telephone system and the potential of a $10 billion moderniza- 
tion of that particular system. If you want to respond to that, I 
would like for you to. 

But really my question is to Secretary Babbitt and Administrator 
Browner, because it seemed both of you in your testimony were 
talking about cooperation and the value of that cooperation. 

Secretary Babbitt, I know you are a native of a border State, as 
I am. My fear if this treaty is rejected, is what this will do to our 
relationship with Mexico, not just in the near-term, but in my gen- 
eration. I think if this is rejected, that there will be harm that can 
never be repaired, at least in my life time. I want to see if you two 
agree that it is important for that cooperation particularly in the 
environmental area. 

Ambassador Kantor. I will give a one-sentence answer. In the 
next six years Mexico will purchase $13 billion in telecommuni- 
cations products. Our companies have now become dominant in 
that market where Alkatel and Nippon were before, as you know 
so well. Wouldn't it be shameful for us to give up those markets 
and allow Alkatel, NTT and others back into the market when 
there is $13 billion about to be spent? 

Frankly, Mr. Perot and the facts seldom stumble into each other. 
We have one more example here of how wrong he was and how 
right the Vice President was. 

Ms. Browner. Mr. Fields, I think you are exactly right. When 
I was in Mexico two weeks ago this was something Mexican offi- 
cials spoke to me about. They are concerned that if this country is 
to reject NAFTA, that the relationship that we have worked so 
hard to develop with the Mexican government will be set back. 

This is not a question about the status quo versus change. This 
is probably change versus retreat. I think we all need to recognize 
that it is in our interests to work with our neighbors where we 
share these borders and work cooperatively and that is what 
NAFTA and specifically the environmental side agreement will 
allow us to do. 

But if the Mexican people feel rejected by this country, it is not 
going to be easy to start down the path of negotiating another 
agreement. That is not something that they are going to feel that 
they want to do having been rejected. So we need to think I believe 
very long and hard before we reject this opportunity of working to- 
gether and of seeing improvements for both countries. 

Secretary Babbitt. Just a couple of thoughts: What President Sa- 
linas told those fishermen in Puerto Pinasco, I did not really elabo- 
rate. What he was saying was that we must take these environ- 
ment initiatives for our own good and as part of our expanded rela- 
tionship. He also said to them that the economic growth that will 
be created by this relationship will enable us to make good on our 
promise that this is in the best interests of Mexico. 

Secondly, there is an extraordinary political debate going on now 
within Mexico. We should not assume that President Salinas, like 
Moses, is leading his people to a new consensus, promised land. His 
leadership effort to reverse the negative legacy of the Mexican rev- 
olution is not going unchallenged in Mexico. 



21 

There will be a presidential election next year and there is a vi- 
brant and strong opposition in Mexico whose campaign theme is 
beginning and verging toward "I told you so; you can't trust them, 
you couldn't then and you can't now." 

Mr. Fields. I agree with Chairman Studds. I feel the presen- 
tation made today is as good a presentation as this committee has 
seen. I wanted to applaud your sincerity and commitment on this 
issue. 

Mr. Tau^in. (Presiding) The Chair has gone on to vote and asked 
me to chair the meeting. The Chairman has asked that those who 
have a question for Mr. Kantor be recognized in the order of ap- 
pearance since he does have to leave. 

Mr. Pickett, do you have a question for Mr. Kantor? 

Mr. Pickett. Thank you, Mr. Chairman. I want to welcome our 
special guests. 

I have four issues that I hear being raised repeatedly in this 
area. The sovereignty issue that Secretary Babbitt brought up. 
Whether or not U.S. laws are going to apply in a case like pes- 
ticides on agriculture produce, and the safeguards to U.S. interests 
in the event something unexpected arises under the agreement. 

Do we have to rely strictly on the dispute resolution process or 
do we have other alternatives for getting out of the agreement? The 
big brother mentality that has existed in Mexico referred to by Sec- 
retary Babbitt — is that something that you feel will be somewhat 
overcome by the provisions of this agreement? 

Then, finally, a related subject, which is the dispute resolution 
and sovereignty of U.S. laws that I alluded to earlier when talking 
about products and services. For example, what about motor vehi- 
cles and trucks coming in from Mexico and their impact on the en- 
vironment in the U.S. if they don't meet U.S. safety standards? 

Ambassador Kantor. I will take two or three of those. Safe- 
guards: Section 801 and 802, plus the side agreement, gives safe- 
guards to unexpected surges of imports and disruptions of employ- 
ment and other matters. 

Two, any country can withdraw from the NAFTA with six 
months's notice. That is the ultimate safeguard in this. 

We have preserved that and it is unusual in a trade agreement. 
Recognizing that the administration has committed in the imple- 
mentation legislation, as you know, Mr. Pickett, and we hope it is 
this administration, to provide in July of 1997 a report of the work- 
ings of the NAFTA covering 15 or 17 issues, including what is hap- 
pening in Mexico. The Congress, of course, is given the right and 
power, as always, to respond. 

Let me go to trucking. I think it is awfully important. There is 
disinformation about this. One, every truck, every driver coming in 
from Mexico must meet every U.S. standard. NAFTA does not 
change this one iota. 

In fact, it must meet insurance standards. It must have an agent 
for service of process and it must be covered by an insurance com- 
pany authorized to do business here. There is no differentiation be- 
tween Mexican drivers of trucks and their insurance and safety 
standards, weight and size standards, any other standard than 
that. 



22 

Let me add one thing about dispute resolution. I am sorry to go 
on so long but it is something that I know about. 

We have not said we would impose our laws on you or that you 
can impose on us. That protects sovereignty. It is the exercise of 
supemational powers which we were greatly sensitive to. We are 
saying, in a dispute resolution regarding enforcement of environ- 
mental or, frankly, worker rights laws in Mexico or in the United 
States or Canada, you must enforce your own law, whatever law 
you have. If there is a persistent failure to enforce, that is when 
you are subject to trade sanctions. 

We don't tell you what your laws must be, but if you have those 
laws, you must enforce them. Frankly, in Mexico that has been the 
problem in the environmental and worker rights area. That is what 
we addressed. 

I think it is precedent-shattering. Not to pat anybody on the 
back, but it is a matter of fact and record. We protected sovereignty 
in every way we could. If there is any pending matter or you have 
not first taken the matter to your domestic authorities, you cannot 
go running to this international Commission. You must take care 
of both of those first in order to bring your case to the Commission. 

Ms. Browner. Mr. Pickett, in the case of pesticides, let me ex- 
plain the situation to you: no food product can enter the United 
States that does not meet our current standards. 

So if a pesticide leaves a residual on a fruit or vegetable grown 
in Mexico and that pesticide has never been licensed in the United 
States or has never been licensed for use on that fruit or vegetable, 
it cannot enter the United States. 

As you know, the administration, I have been working very close- 
ly with my colleagues at the Food and Drug Administration at the 
Department of Agriculture to modernize and improve our food safe- 
ty laws, to make sure we look at all the effects associated with pes- 
ticides. 

Those changes in the law, if we are able to see a bill passed by 
this body and by the other chamber, will also apply. We can im- 
prove our laws and Mexico must honor the improvement in our 
laws. Before a food product can enter this country, it must meet 
our current standards. 

Mr. Tauzin. The gentleman's time has expired. The Chair will be 
recognized. 

I will submit for the record some technical questions and ask you 
to respond for the record three questions where our Coast Guard 
Subcommittee has jurisdiction. These are questions about whether 
NAFTA compels the pilot licensing authority to issue a license to 
citizens of Mexico and Canada and whether the State piloting au- 
thority in the United States in any way would have to recognize 
the pilot's license for operating in U.S. piloted water and the Fed- 
eral authority in the United States jurisdiction. I will submit them 
for the record. 

[The information may be found at end of hearing.] 

Ambassador Kantor. Mr. Chairman, if you wish I can give you 
an answer in short right now. The United States reserves the right 
to adopt or maintain any measure relating to the provision of mari- 
time transportation services and the operation of U.S. flag vessels 
including the following: Certification, licensing and citizenship re- 



23 

quirements of pilots performing piloting services in U.S. territorial 
waters. 

Mr. Tauzin. So you are saying nothing in NAFTA would inter- 
fere or deny that? 

Ambassador Kantor. Absolutely. 

Mr. Tauzin. Under GATT, the U.S. challenged the embargo on 
the tuna which said that trade sanctions cannot be imposed upon 
a product based upon methods of production. Called into question 
are other laws of the United States designed to protect sea turtles 
and other marine mammals that provide sanction authority. 

In 1991, Chairman Studds and I wrote requesting an embargo on 
shrimp products because of the provision of the GATT declaring it 
an unfair trade practice. The question is, if today using the author- 
ity of the Fisherman's Protection Act the United States did decide 
to do what obviously the President would not do in 1991, protect 
American shrimpers and fishermen from unfair competition from 
those in Mexico who are not following the law in tuna or sea tur- 
tles, if we did in fact embargo fish products such as shrimp from 
Mexico, would NAFTA give the Mexican authority an additional 
challenge to GATT or beyond GATT to those laws as a violation of 
the GATT or NAFTA treaties? 

Ambassador Kantor. Absolutely not. 

Mr. Tauzin. That is an absolutely not? 

Ambassador Kantor. Absolutely not. 

Mr. Tauzin. There is nothing in there that would allow them to 
say that a trade sanction in the Fishermen's Protection Act or Pub- 
lic Law 162 related to driftnets, there is nothing in NAFTA that 
gives Mexico complaint authority over that. 

Ambassador Kantor. No. 

Mr. Tauzin. What assurances have we had in the Gulf of Mexico 
since we are told that Mexico is in the process of imposing TED re- 
quirements on fishermen? Every fisherman we talk to tells us that 
is not happening and everyone who survives tells us they are still 
facing unfair competition from Mexican fishermen who did not use 
TEDs. 

Our own government in 1991 refused to assist in embargoing 
shrimp products. What assurance do we have that under NAFTA 
things will improve? 

Ms. Browner. In 1993, Mexico mandated the use of excluder de- 
vices on all commercial shrimping vessels. The Mexican shrimp 
fleet has received training in the United States of TEDs from U.S. 
experts. 

Under the environmental side agreement, the Council of Envi- 
ronmental Ministers would be available for a complaint raised by 
any citizens of the United States, Canada or Mexico that Mexico 
was persistently failing to enforce that law they adopted in 1993. 

Mr. Tauzin. Are they enforcing it? 

Ms. Browner. We know they have a law in place and we know 
that they have been trained in using the devices. NAFTA gives us 
a forum with environmental officials for looking at this. Without 
NAFTA we don't have a forum with people who care about the 
issue in the same way that you do for dealing with and resolving 
this problem. 

Mr. Tauzin. Ambassador Kantor? 



24 

Ambassador Kantor. Just to follow up. With NAFTA, if Mexico 
persistently fails to enforce its law, we can get fines and trade 
sanctions against Mexico to induce them to enforce the law. With- 
out NAFTA, we have no influence at all. I think that is key. 

Mr. Taylor of Mississippi. Would you yield? 

Mr. Tauzin. I will be happy to. 

Mr. Taylor of Mississippi. Mr. Kantor, that is one of the silliest 
things I have ever heard in my life. 

Ambassador KANTOR. I have said sillier things. 

Mr. Taylor of Mississippi. Well, I haven't known you that long. 
To say you have no means of enforcing the law now is ridiculous; 
and to say that an additional piece of paper will make a difference 
to a Nation that is already ignoring that law is even stupider. I 
would take high objection with that. We have agreements with 
these people. We allow them access to our markets. We don't en- 
force that law now. So how is NAFTA going to be any different? 
It will be another piece of paper that they ignore. 

Mr. Tauzin. I would point out a grave suspicion when our own 
country would not help our fishermen. 

Ambassador Kantor. If I might respond, you know Mrs. Kantor 
didn't raise any stupid kids, and I am not one of them. If you want 
to keep things the same, have no leverage over Mexico, make sure 
the law is not enforced — if you will allow me, and if you don't that 
is fine, it is up to you — then keep the status quo and make sure 
we never, never change the situation. 

What we are doing with the NAFTA is something unprecedented 
in trade history. We are saying to another country, Mexico, enforce 
your laws and if you don't, fines or trade sanctions and you will 
be hurt economically. We have had free trade with Mexico for 
years, but the problem is that it is only going one way, from Mexico 
to the United States. 

What this treaty does is, it breaks down the barriers and sup- 
ports American workers for once and says they ought to have a 
level playing field; Mexico ought to enforce the laws and put Amer- 
ican on the same competitive basis and we will win again. I believe 
in American workers, as does this administration, and I believe you 
do, too. 

Chairman Studds. (Presiding.) Mr. Kantor, there are five mem- 
bers who have expressed a desire to ask you questions. You are 
your own arbiter of time. 

Ambassador Kantor. This committee is so important, let's keep 
on going. 

Chairman Studds. The gentlemen from New Jersey, Mr. Saxton. 

Mr. Saxton. Mr. Chairman, in your opening statement you re- 
called how difficult an issue this is and it certainly is. It is difficult 
for a number of reasons. It is complex, complicated. It deals in 
international policy in a new way that has never been tried before. 

It is also difficult because many advocates on both sides of the 
issue seem to take great liberty to use facts in ways that are at 
least misunderstood by me. 

Ambassador, in your opening statement you made reference to 
President Kennedy and Smoot-Hawley. Let me ask two questions. 

Your reference to President Kennedy was that it was largely be- 
cause of his policy of free trade that our country began to do well 



25 

in 1964. I agree that our country began to do well in 1964, but I 
take great umbrage to the fact that you attribute that to the 1961 
free trade policies implemented that year. 

In fact, President Kennedy himself said in his State of the Union 
address in 1963, this country cannot continue to advance the cause 
of peace and freedom around the world if we fail to set the eco- 
nomic pace at home. He went on in that speech to talk about tax 
policy. 

He said we should reduce income taxes at the top from 90 per- 
cent to 70 percent, at the bottom rung from 20 percent to 14 per- 
cent. He also said we should reduce the corporate income tax and 
he also said we should expand the investment tax credit. 

It was the following year after Kennedy was assassinated that 
those policies were implemented and in fact the economy began to 
grow. 

Now, I am a free trader like you. I am not so sure about their 
vote, but I am a free trader like you and perhaps like John Ken- 
nedy was. But to make the case before the American people that 
it was because of a policy implemented in 1961 that the economy 
began to grow in 1964 when President Kennedy himself said in his 
State of the Union that we needed to do something different. 

Secondly Smoot-Hawley. I saw a picture of the two gentlemen 
last night. But for this administration to make the claim that this 
is Smoot-Hawley is a misrepresentation to the American people. 
Smoot-Hawley was a policy brought about because of a lousy econ- 
omy in this country that they thought at the time would keep for- 
eign goods out and we would produce more here to help our econ- 
omy. 

That is not what this is. This does not increase tariffs on goods 
coming into the country. It does not talk about our economy. It 
talks about enhancing the ability of American people to buy prod- 
ucts by enhancing their economy. That is not Smoot-Hawley. 

Would you clear me up on those issues? I would appreciate it 
very much. 

Ambassador Kantor. I will do the best I can. 

First of all, we were referring to what President Kennedy re- 
ferred to in 1961, 1962 and 1963: tying the domestic economy to 
our foreign trade policy, which we did with the Kennedy Round, 
Tying those two together led to 100 months, as you know so well, 
of expansion, the longest expansion of this economy in the 20th 
Century and the most pronounced. 

President Clinton says we need to tie domestic economic policy, 
which is truly our national security, to our foreign trade policy to 
ensure we have the same kind of effect. 

Let me go to Smoot-Hawley, What the Vice President said last 
night was precise and well-taken, Mr. Perot advocated a social tar- 
iff on Mexican goods coming in. 

Raise the price of Mexican goods, keep them out of this country, 
close our doors to foreign products until they reach our level in 
terms of prices and, therefore, we will export more. That is his the- 
ory. 

That is what Smoot-Hawley tried to do. You know what hap- 
pened better than I, You are a better historian. We lost one-third 



26 

of our exports and one-third of our imports and we exacerbated the 
Great Depression, as you know so well. 

Let me talk about taxes and I will end on this. The $7.5 billion 
cut in tariffs for goods going into Mexico and $2.5 billion coming 
the other way is a tax cut for American consumers. There is a large 
tax cut and we ought to be for it because it is good for American 
consumers and also good for American workers who will send prod- 
ucts, not jobs, south. 

Mr. Saxton. I know this is not an environmental issue that I ask 
a question about. It is certainly an economic one. It has to do with 
something John Kennedy did differently, much differently than this 
administration is doing relative to tax policy. It has something to 
do with some things that were quite different about Smoot-Hawley 
than are true to this trade agreement. 

I just want to be on the record as having been able to draw a 
distinction in those two instances. 

Thank you very much. 

Chairman Studds. Let me remind the members of our time con- 
straints and say that within the best of my ability to keep with our 
normal rules of procedure, given Members' arrivals, and within the 
constraints of recognizing first those Members who wish to ask 
Ambassador Kantor a question, the next members in sequence that 
I am told I should recognize are: Mr. Weldon, Mr. Gilchrest, Mr. 
Coble, Mr. Stupak, Mrs. Unsold and Mr. Hughes in that order, as 
long as the Ambassador is able to stay. 

The gentleman from Pennsylvania. 

Mr. Weldon. I thank the chairman for the promotion to the Am- 
bassador, as well, Mr. Chairman. 

Mr. Ambassador, I appreciate your coming. I want to especially 
thank you, as well as I know John Dingell does. He and I are the 
Members of Congress on the Migratory Bird Conservation Commis- 
sion. 

We appreciate your clarification of the issue as related to those 
agreements that we have and your further definition of the agree- 
ment as it relates to Mexico and getting some additional conces- 
sions from them. We appreciate that. 

I am one of the 13 undecided members of this committee, al- 
though I did vote for the fast track process. I was taken by the 
stress that you made in your testimony about the importance of 
this agreement in terms of not just free trade, but what it means 
to the President's stature as a leader of this country in the free 
world in negotiating other agreements. 

Would you just expand upon that again for us and the impor- 
tance of that aspect of this agreement and what it means, espe- 
cially in light of the other trips he will be taking following this vote 
next week? 

Ambassador Kantor. Thank you, sir. Yes, I will. I will try not 
to take too much time, but it is a critical question. 

We have right now stagnant economies in the European Commu- 
nity and Japan, as well as in most of the other industrialized na- 
tions. In fact, our economy is doing better than almost every other 
industrialized country in the world. 



27 

The consequences of that are that our exports are down, our im- 
ports are up, our trade balance is being hurt. We are not gaining 
global growth as a result because our markets are not expanding. 

The President has made it very clear. He feels a responsibility, 
working with the Congress of the United States, to lead global 
growth by trying to reach trade agreements which indeed create 
new markets and expand trade and in fact give a psychological 
boost to the world economy by reaching a successful conclusion of 
the Uruguay Round. 

As we try to get to the end of that round after seven and a half 
long and difficult years, we have an opportunity to give a psycho- 
logical as well as economic boost to the rest of the world. 

But we can't do it if we do not have the credibility to walk in 
and say, one, we are willing to do the same thing in our own hemi- 
sphere. We have confidence in our people and confidence in, frank- 
ly, the second-fastest growing economic region of the world which 
is south of the Rio Grande River. 

Number two, the clout we will gain from that, frankly, from sit- 
ting at that table representing the largest economic region in the 
world. 

Number three, frankly, I don't know how I convince my col- 
leagues, although I will try regardless because it is so important, 
that if we can get that agreement through the Congress of the 
United States, if we could not get the NAFTA through. 

You could take this agreement to Tokyo or Brussels and give 
them about five minutes to translate it if they need to, and it 
would be signed. They cannot understand why this is such a tough 
debate in this country. 

Mr. Weldon. Mr. Ambassador, I hear you loud and clear, but I 
have to tell you the frustration I and other Members on my side 
have. 

The Republican National Committee is running phone banks in 
my district right now in support of this program as they are across 
the country. The Democratic National Committee is doing nothing 
to support the President on this issue. Yet you are telling me it is 
one of the most important issues facing this Presidency in terms 
of his international leadership. 

If the members of his party cannot get behind him on the impor- 
tance of this issue for other worldwide problems and concerns, how 
can you expect Republican Members to walk the line on this issue? 
That is what you are asking. 

In fact, my Republican colleagues are saying this behind the 
scenes every day and will say it up until next Thursday. 

You cannot convince three-fourths of your own Members, and 
your Majority Leader, your Majority Whip who are out there every 
night doing Special Orders against NAFTA. 

You say it is the most important vote for this President in terms 
of international stature. How can you come back and tell us we 
should walk the line and support this agreement? That is the most 
frustrating thing we have to come to grips with. 

You cannot have it both ways. If the President's party thinks this 
is important, then the President's party should get behind him as 
our party is forcing us to walk the plank on this vote. I'm sorry. 
I don't mean to aim this at you. I am aiming it at those people who 



28 

are not giving you the support that you claim this President needs 
to get the kind of stature and international recognition that you 
say is so important for his Presidency. 

Ambassador Kantor. I don't disagree with you in one aspect of 
that. But let me assure you, this President is working his heart out 
to get every Democrat and Republican vote we can find because of 
the importance of this treaty which you just articulated so well. He 
is doing it publicly and he is doing it privately. 

He has seen 114 Members over the last two-and-a-half weeks 
and he will continue to do it up until the moment of the vote. 
Trade is not a partisan issue. There are no Democrat or Republican 
jobs in this country, they are American jobs. We have to grow this 
economy. We agree with you on this issue. 

Frankly, one of the best aspects of this, if we can win, is we join 
together in a bipartisan way to move this economy forward and 
lead global growth. It will probably help the atmosphere. I am not 
going to speak to this body. I don't know it like all of you know 
it. But as for the country, they are looking to all of us to work to- 
gether, get this done, move forward again and grow this economy. 

I appreciate your remarks. Let me just assure you, we won't 
waste one second over the next eight days, as we have not over the 
last few weeks, to get this done. 

Chairman Studds. I thank both of the gentlemen for that ex- 
change. 

The Chair acknowledges that it is almost inevitable that I will 
make some error or mistake in the sequence in which I recognize 
Members. We are doing our best to accommodate a lot of comings 
and goings here. 

The gentleman from Maryland, Mr. Gilchrest. 

Mr. Gilchrest. I do have a question for Mrs. Browner and Mr. 
Babbitt. 

Chairman Studds. These are questions only for Ambassador 
Kantor because his time is limited. You don't have to have one. 

Mr. Gilchrest. This is a very minor question. Mr. Kantor, I will 
say something about your exchange with the gentleman from Penn- 
sylvania that I think and I am really not a political person. 

Ambassador Kantor. I am holding on to my billfold. 

Mr. Gilchrest. The gentlemen from Pennsylvania, this agree- 
ment strongly supported by the President and strongly supported 
by the Republican Party will favor Republicans in the next election 
because the American people will perceive that this is really a good 
agreement and the credibility of those who stuck their neck out is 
going to go high. 

My question was a minor question but it might have broad rami- 
fications for a variety of products. President Ford put a ban on im- 
ports of assault weapons, but not on the export of assault weapons. 
Now, in the light of NAFTA, if we sell assault weapons to Mexico, 
what will that do to Mexicans who produce assault weapons and 
want to sell them to the United States? 

Ambassador Kantor. That is a safety issue and we can keep 
them out under U.S. law, if that is what you are driving at. It does 
not change and we still can maintain that ban. 

Mr. Gilchrest. So there is no question that we would not import 
assault weapons? 



29 

Ambassador Kantor. We don't change the law in that aspect in 
any way whatsoever. 

Chairman Studds. I assume the gentleman's question was in the 
context of wildlife. 

Well, in any event, the gentleman from North Carolina Mr. 
Coble. 

Mr. Coble. Thank you, Mr. Chairman. 

Ambassador, it is good to have you all with us today. Let me ask 
a very simplistic question. There is not much simplistic about 
NAFTA, but I think this one is. 

In my district, Mr. Ambassador, one-third are for NAFTA, one- 
third opposed and one-third undecided. That is how I am reading 
it back home. I am one of those undecided, as you mentioned ear- 
lier. 

Tell me, Mr. Ambassador, if I am wrong in this analysis: It is my 
belief that NAFTA is not as bad as Ross Perot portrays it, nor is 
it as good as Carla Hills and you portray it. No offense to you. 

But when I look at the score card, the program, and I see Jesse 
Helms and Jessie Jackson on the same side of the issue, bells start 
ringing in my head. Mr. Ambassador, am I correct when I say the 
truth lies somewhere in the middle from these two extremes. 

Ambassador Kantor. Yes, sir, I will make two quick points. I 
tried to say it before: this will not solve all our economic problems 
in this country, nor will it solve all of our problems with Mexico, 
but it is better than the situation that we have today. We should 
not let perfect become the enemy of good. That is my first point. 

You raise a very important issue, sir. Look who is for this and 
look who is opposed. We have on one side Ross Perot, Pat 
Buchanon, Jerry Brown, et al. 

On the other side, we have all five living ex-Presidents, plus this 
President. We have all 14 living Economics Nobel Laureates in the 
country. As Mr. Samuelson said, he thinks even some who have 
passed away are writing in as well in support. We have 41 gov- 
ernors. Only two are opposed, and the rest are undecided. 

I don't know of any other issue with this degree of controversy 
where 41 governors would support it in this manner. Frankly, 
every ex-Secretary of State, Democrat or Republican, ex-Secretary 
of the Treasury, Democrat and Republican, all support this treaty. 

Just last night after the debate, USA Today did a poll: 57 per- 
cent of Americans now support NAFTA. I think what happened 
last night is what they call a circuit breaker in policy. I think it 
is moving in the right direction from my point of view. 

You are right. I am proud to be associated with Ambassador 
Hills. We were old colleagues in Los Angeles practicing law. 
NAFTA is not as good as some with hyperbole say it is. It is not 
bad at all, frankly. It is all to the good. 

It will make a difference, but it makes a tremendous difference 
in leading to the Uruguay Round, in leading toward an investment 
framework in Asia and in leading to this country providing leader- 
ship in global growth. 

Mr. Coble. Mr. Ambassador, I thank you for that. Mr. Chair- 
man, I will conclude with this comment. Mr. Ambassador, I think 
you may enjoy this. I put that same question to Congressman 
Kolbe from Arizona. You will appreciate his answer. He said you 



30 

are half right. He said it is not as bad as Ross Perot says it is. He 
would not address the other side. 

Thank you very much, Mr. Chairman. 

Chairman Studds. Mr. Ambassador, please feel free at any time 
to raise your hand and ask to be excused. 

Ambassador Kantor. I can do one more round. When you said 
the number 13, it got my attention. 

Chairman Studds. I thought it might. Not only that, but I was 
not counting Mr. Coble. That is 14. We have six Members who still 
want to talk with you. Everybody be as brief as you can. 

The gentleman from Michigan, Mr. Stupak. 

Mr. Stupak. Thank you. Mr. Ambassador, I am not one of those 
13. I am solidly against NAFTA. My question relates to Great 
Lakes water issues. That issue has been raised with you before by 
other environmental groups. 

I still have not gotten a satisfactory answer, so I welcome the op- 
portunity to address it with you here today. NAFTA includes spe- 
cific references to environmental treaties that cannot be challenged 
under NAFTA. 

Unfortunately, none of those treaties and agreements that di- 
rectly protect the Great Lakes water are included, specifically the 
Great Lakes Water Boundary Treaty of 1909, the Great Lakes 
Water Quality Agreement, the Great Lakes Charter, the Great 
Lakes Water Quality Guidance. 

Therefore, if these treaties are not included that protect Great 
Lakes water, they can be challenged then under NAFTA. 

In a letter you wrote to the Northwest Environmental Advocates 
responding to the concerns of this environmental group relating to 
inter-basin transfers of water under NAFTA you stated, "The cur- 
rent U.S. -Canadian Free Trade Agreement and the NAFTA are si- 
lent on the issue of inter-basin transfers of water. 

In the next sentence you said, "However, under CFTA and 
NAFTA when water is traded as a good, all provisions of the agree- 
ments governing trade in goods apply, including national treatment 
provisions under Article 301 of NAFTA." 

Therefore my question is: Great Lakes can then be defined as a 
good and can be open to trade under NAFTA. Is that correct? And 
what assurances exist in the treaty to maintain the rights of State 
governments to regulate and protect water resources so water will 
not be traded as a good under this agreement? 

Ambassador Kantor. I am sorry if we were not clear enough in 
our letter. NAFTA only deals with water traded as a good, such as 
when it is bottled water. That is number one. Number two, NAFTA 
does not give Mexico any right to our lakes and streams any more 
than it gives us a right to Canada's water. 

Trade and investment agreements do not govern large-scale 
water movements. The only reason NAFTA mentions water is the 
bottled water as I mentioned to you earlier. For decades we have 
had agreements with Canada and Mexico concerning boundary wa- 
ters. These are not affected by NAFTA. I think Ms. Browner would 
like to add to that. I hope that clears it up. I apologize for the am- 
biguity. 

Mr. Stupak. I would really disagree because 2201 under the Tar- 
iffs heading defines water and natural water has no tariff on hot- 



31 

tied water and the others, water with sweeteners added, there is 
tariffs on them and they say how that schedule will be broken 
down. 

You deliberately, and in your written testimony today also, indi- 
cated to us that raw timber, logs, if you will, are excluded. It is 
called a natural resource. Why wasn't water excluded since it was 



Ambassador Kantor. All of our treaties are protected. As we go 
along, we have had complete cooperation, frankly, from Mexico and 
Canada. That is not in question by any of the three countries. 

Ms. Browner. Mr. Stupak, you raise a very important re- 
source — perhaps one of our most important water resources in this 
country that we share with our neighbor to the north. I believe the 
opportunity that exists, the involvement of the public, will allow us 
to address concerns that have been raised with respect to the Great 
Lakes. 

I also think you are aware that this administration has proposed 
the Great Lakes water quality initiative, that we are committed to 
seeing the water quality of the Great Lakes improve, that that pro- 
posal which is now in a comment phase comes out of over 100 pub- 
lic meetings that were held in the States surrounding the Great 
Lakes, and that it puts in place programs that will lead to wise 
management, both in terms of water quality and water quantity is- 
sues for the Great Lakes. It provides opportunities for us to con- 
tinue to work with our neighbors to the north. 

Mr. Stupak. That is a proposed agreement that you are talking 
about now? 

Ms. Browner. It is a proposed rule and it will be final in 24 
months. 

Mr. Stupak. A proposed rule. It is not included in NAFTA. As 
we talked about this morning and all three of you testified as to 
specific environmental treaties that are included in NAFTA, but 
nothing concerning Great Lakes water. Again I go back to Ambas- 
sador Kantor's letter which says "NAFTA is silent on the issue of 
inter-basin transfer of water". Therefore if it is not included, it can 
be challenged and it can be exported. 

Ms. Browner. On the issue of the Great Lakes water quality ini- 
tiative it is done pursuant to our law. It is a rule that is proposed 
and it will be adopted pursuant to the laws of this country. And 
as such, we will be able to enforce it and it will not be subject to 
a challenge as an unfair restraint of trade, of the standards that 
will be put in place and the decisions that will be made to insure 
clean water for the future. 

We have been very careful in the side agreement in the NAFTA 
to preserve the right for this country to adopt environmental stand- 
ards that are important to our health and to natural resource pro- 
tection. We have been very careful, as Mr. Kantor testified earlier, 
to protect the rights of our States and local governments to also act 
to protect the public's health and protect our natural resources. 

So while a specific law of this country may not be referenced in 
the side agreement or in the treaty, there are provisions that en- 
sure that those laws will be protected and that our authority to 
proceed to implement programs pursuant to those laws will be pro- 
tected. 



32 

Chairman Studds. The time of the gentlemen has expired. 

The next person is Mr. Torkildsen. Although we have several 
more Members, I am informed, Mr. Ambassador, this is the last 
chance you have. 

The gentleman from Massachusetts. 

Mr. Torkildsen. Thank you, Mr. Chairman. I, too, want to 
thank the members of the administration for testifying today. I 
think your testimony was great. I am also not among the 13. I am 
strongly in favor of this agreement, as I have conveyed to you. 

I want to talk about a related issue. I think it is essential that 
we deal with trade and the environment hand-in-hand. I think the 
side agreement does a very good job, perhaps not perfect. Ambas- 
sador Kantor, I agree we should not let perfect become the enemy 
of good. 

In a related area, dealing with both trade and the environment, 
we have the subject of bluefin tuna. I know that is not addressed 
in the NAFTA. It is a particular interest of mine, given the fishing 
district that I represent. 

I just wondered if you could address that? Was there any at- 
tempt to get Mexico during these negotiations into ICCAT? Sec- 
retary Babbitt mentioned CITES as a way of enforcing certain en- 
vironmental restrictions in international trade. Was there talk 
about getting Mexico into ICCAT? 

Right now we have a situation where U.S. bluefin tuna fisher- 
men are being penalized as opposed to European bluefin tuna fish- 
ermen, Mexico does not ever follow those restraints. 

Was there an effort and will the Clinton administration seek a 
one-year moratorium on further reductions of bluefin tuna quotas 
that are being discussed right now? 

Ambassador Kantor. Mexico has committed to join ICCAT. 

Mr. Torkildsen. Is there any time certain? 

Ambassador KANTOR. I would have to ask that question. They 
committed to do it. Let me give you two interesting aspects of what 
we get out of NAFTA that are not readily apparent. One has to do 
with immigration. We are about to reach a new understanding in 
two critical areas of immigration with Mexico as a result of the 
NAFTA and the cooperation. 

Second, President Salinas committed, on the day we initialed the 
side agreements, to put into force measures tying real minimum 
wage to productivity gain in Mexico and then indexing other wages 
in Mexico to rise as a result. It has been done. It is now put into 
law. 

I think the Mexican government has been forthcoming and has 
stood by each and every commitment they have made. We have 
every expectation they will stick by this commitment as well. 

Mr. Chairman, I wish I could stay longer. I apologize to the com- 
mittee for having to leave. 

I thank you for your courtesies. 

Chairman Studds. We appreciate it. We are sorry to have over- 
extended you. We apologize to you for that. We apologize to your 
two colleagues for monopolizing — I guess that didn't bother them at 
all. 

Ms. Browner. We think the Ambassador should apologize to us 
for leaving us to answer these tough questions. 



33 

Ambassador Kantor. I am just going to say good luck, and I am 
leaving. 

Chairman Studds. Now, I will do my best to go back and forth 
across the aisle amongst those Members who have not yet had an 
opportunity to ask a question. 

The gentleman from New York, Mr. Hochbrueckner. 

Mr. Hochbrueckner. Mr. Chairman, I have no questions at this 
time. 

Chairman Studds. The gentleman from California, Mr. Ham- 
burg. 

Mr. Hamburg. Thank you, Mr. Chairman. 

I would like to go back to something that was originally brought 
up by you, Mr. Chairman, in your question about the sovereignty, 
the authority of local governments and State governments to en- 
force their environmental laws. 

I think one of the real concerns about NAFTA as it pertains to 
the environment is that these laws on the local. State, and national 
level will not really be protected. 

Administrator Browner, I think you answered that that was not 
something that we should be very concerned about, that that sov- 
ereignty will be protected, and that if localities and States want to 
adopt more stringent laws or adopt it across the breadth of this 
treaty that those will be protected. 

Is that something that is guaranteed by the agreement itself? Is 
it intrinsic to the treaty itself or is it something that the side 
agreements protect? 

Ms. Browner. If I might explain, when this administration en- 
tered into negotiations on the side agreement, this is one of the 
things we were absolutely clear about from the beginning, that we 
wanted to make sure and clarify in the side agreement that the 
right of our States and local government, not just to enforce envi- 
ronmental laws, but to adopt environmental laws, would be pro- 
tected. 

It is, I believe, addressed clearly in the environmental side agree- 
ment. 

I might also say that if I look at the groups who have studied 
the environmental side agreement and the NAFTA and have now 
said that it is unequivocally good for the environment, they are 
groups that have a long history of caring about this very issue, of 
fighting in the laws we adopt to preserve the rights of State and 
local government groups such as National Wildlife Federation, 
EDF, et cetera. 

Mr. Hamburg. This is something that some environmental 
groups feel very strongly one way and some feel very strongly the 
other. My specific question is about Article 50 of the environmental 
side agreements. 

If you could address that issue. I know it has been discussed at 
the Energy and Commerce Committee, and there was some discus- 
sion with the administration about Article 50. 

Just for everybody's information, Article 50 says a party may 
withdraw from the side agreement six months after it provides 
written notice of withdrawal to other parties. If a party withdraws, 
the NAFTA itself shall remain in force or the remaining parties. 



34 

This issue of linkage is something that is being debated pretty 
broadly right now. What is the administration's current position on 
the side agreements and the body of the agreement as it pertains 
to the environment? 

Ms. Browner. They are absolutely linked. The President called 
for the negotiation of a strong side agreement. He believes it is es- 
sential that we see that side agreement fully enforced and we are 
committed to doing it. 

Mr. Hamburg. So, if Canada or Mexico says they are going to 
withdraw from the side agreement, that they are going to give no- 
tice and within six months they will no longer be a party to a side 
agreement, what effect does that have on NAFTA overall? 

Ms. Browner. We have the right with six months notice to with- 
draw. The President made it clear that if a country would with- 
draw from the side agreement, that we would exercise our option 
to withdraw from the agreement and the benefits available to the 
country would no longer be available. We are absolutely committed 
to seeing the side agreement enforced, to seeing it be an integral 
part of NAFTA. 

We are using all mechanisms available to us to be sure, includ- 
ing an executive order which will be signed by the President as 
part of the NAFTA package. An executive order has the full force 
and effect of law until undone in the future. We are using all the 
tools available to the administration to be sure that the environ- 
mental side agreement is maintained and it is part and parcel of 
the NAFTA. 

Mr. Hamburg. I am very glad to hear that, because I have seen 
evidence to the contrary as far as the administration's determina- 
tion to do that. 

One of my concerns about our entering into this relationship 
with Mexico is my concern about their commitment in the environ- 
mental area. There is a dispute resolution process as part of the 
environmental side agreement. 

Secretary Babbitt, you know, you and I don't go back a long way, 
but I really have a lot of respect for you and I really enjoy working 
with you. I want to mention something that has been of concern 
to me. 

It is a quote that has been pretty broadly published by Mexico's 
Commerce Secretary Mr. Puche, who has referred to this dispute 
resolution process this way: He said the timeframe for the dispute 
resolution process makes it very improbable that a stage of sanc- 
tions could ever be reached. 

This kind of statement, I believe, makes many environmental 
groups and people like me concerned that this dispute resolution 
process under the environmental and labor side agreements is real- 
ly ever going to have much teeth or much effect. 

The dispute resolution process under the environmental side 
agreement is thought to involve something like a 500-day time- 
frame. That is a long time. That is almost a year-and-a-half. 

I wonder whether that is workable. 

Secretary Babbitt. I have not counted up the number of days. 
My sense is these things work. Why did Serra Puche say that? Be- 
cause he is selling hard in Mexico on the most difficult piece of this 



35 

treaty in Mexico and that is these issues of sovereignty and dispute 
resolution. 

Somebody help me on the number of days, because I can't count 
them up to 544. 

Ms. Browner. I don't think it in any way counts to 500. There 
are timeframes spelled out in the agreement to be sure the process 
moves forward. Again, I would ask you to remember that this is 
a public process and there is opportunity for public involvement. 

I will sit as one of the members of the Council. I believe that 
when you have the level of public participation and transparency 
that we have committed to that we have agreements from Mexico 
and Canada and that I will be able to do as an individual member 
of the Council, that that will necessarily lead to rapid resolution of 
these matters. I don't think any of the countries will want to find 
themselves dealing publicly with the allegation that they are con- 
sistently failing to follow their environmental laws. 

That complaint will be made public from the beginning and that 
will put tremendous pressure on the country to demonstrate why 
it is that this complaint has been raised and have they addressed 
it and is it not true. While there are timeframes laid out, I don't 
believe they add up to 500 days in any way, but I think it is impor- 
tant to also recognize the opportunity for public involvement and 
participation and the efi'ect that will have on the process. 

Mr. Hamburg. This is 470 days actually. 

Chairman Studds. The gentlewoman from California. 

Ms. SCHENK. Thank you, Mr. Chairman. 

I thank Mr. Andrews for yielding. I will ask that my statement 
be put into the record. 

[The statement of Ms. Schenk follows:] 

Statement of Hon. Lynn Schenk, a U.S. Representative from California 

Thank you, Mr. Chairman. I will be brief. Others have already mentioned many 
of the issues which concerns me about the North American Free Trade Agreement 
(NAFTA), so I will take this time to talk about the perspective of a Member from 
a border district — a district that for many years has been inundated with raw sew- 
age flowing across the border from Tijuana, Mexico. 

Now, the Tijuana sewage problem existed long before a NAFTA was ever proposed 
and will continue to be a problem whether this NAFTA is implemented or not, but 
San Diego's experience with the Mexican federal and state governments colors my 
constituents' perception of a free trade agreement. 

With millions of gallons of raw sewage flowing through the Tijuana Valley and 
onto our beaches, the health of our communities is at risk from encephalitis, dys- 
entery, and other sewage born diseases. Our coastal economy has been seriously 
compromised as our beaches close, and the quality of life in all the South Bay Area 
suffers. 

Prior to opening negotiations for the NAFTA, the Mexican government's response 
to the Tijuana Problem was sympathetic, but they took little action. The NAFTA 
negotiations did result in a spurt of interest by both countries' administrations. 
Some progress has been made. We are still, however, in the discussion mode waiting 
for the first bulldozer to move some eairth. I am concerned that the passage of the 
NAFTA will return us to the "all talk and no action" days. Unfortunately, the envi- 
ronmental side agreement gives me no solace. I think the side agreement will result 
in a lot of talk and virtually no action. 

Mr. Chairman, neither the passage nor the defeat of NAFTA will solve our Ti- 
juana sewage problem. But in the minds of many of my constituents the two issues 
are inextricable. Without some concrete and substantial progress — without some- 
thing being done that actually reduces the amount of raw sewage pouring into the 
Pacific — it would be difficult to persuade many San Diegans, including me, that this 
NAFTA is in our best interest. Last August, the City Council of the City of Imperial 
Beach, situated at the mouth of the Tijuana River and suffering the economic bur- 



36 

den of closed beaches, passed a resolution in opposition to the NAFTA because of 
the sewage problem. Mr. Chairman, I ask that that resolution be included in the 
record. (See end of hearing for resolution mentioned.) 

I am sorry that this agreement does not live up to what a good free trade agree- 
ment should be. I hope that after this agreement is defeated the Clinton Adminis- 
tration will undertake to negotiate a trade agreement of its own that is good for 
the citizens of Mexico and the United States. 

Thank you, Mr. Chairman. 

Ms. SCHENK. This is very difficult for me. Secretary Babbitt and 
Ambassador Kantor and I go back a very long time as good friends 
and Administrator Browner is a new special friend. So sitting 
across the table on an opposite side of an issue is even tougher 
than facing my husband who is a pro-NAFTA advocate to the ex- 
treme. 

I don't support the agreement. I won't be voting for it. As you 
both know, I represent a part of San Diego and a part of my dis- 
trict immediately abuts the border. You are very well aware of 
what is going on there and the issue that has been ongoing for over 
50 years where we have basically in Imperial Beach and in Coro- 
nado been the open septic tank to Tijuana's toilets. 

When they flush, it flows across the river through Mr. Filner's 
district and lands on the beaches and in the waters of my district. 
Since last June the beaches were closed all through the summer for 
an area that relies on tourism for its economy. I don't have to draw 
you a word picture of what it looks like and smells like down there. 

For all these years, Mexico City has been, shall we say, dip- 
lomatically sympathetic. Washington has been arrogant and bu- 
reaucratic. This is San Diego's problem, even though we all know 
it is not. It is a Federal and international problem. 

This is not a reflection on you, Ms. Browner, because I have the 
greatest respect for you, but the EPA has been the worst offender. 
Last spring I was forced to plead with the President of the United 
States aboard Air Force One to do something very simple, to order 
EPA to pay a bill that it had a contractual obligation to pay to the 
city of San Diego for treating some of the Tijuana sewerage that 
it undertook to treat. 

The bottom line is that I don't have a great deal of faith that — 
despite the most sincere good intentions of each of you and your 
colleagues and the President — when it comes time to implement 
this agreement at the working level, whether it is the environ- 
mental issues or the labor issues — when we see the people of this 
country and the millions of local stories — whether in San Diego and 
the Great Lakes area — which all come together to make macro pol- 
icy, and when all these local political issues that come together, I 
just don't have a lot of confidence that we are going to see all the 
great, good things that have been represented by Ambassador 
Kantor and all the pro-NAFTA people. 

I guess that is a long way of saying what assurances do we have 
long after you are gone that good things will happen, particularly 
in the environmental area? 

Ms. Browner. Mrs. Schenk, I want to speak specifically to the 
first issue you raised and that is the question of the Tijuana River 
and the waste products that are clearly affecting your constituents. 

No one finds that situation acceptable. I certainly don't find that 
situation acceptable. I think, as you know, the President's budget 



37 

did call for $70 million for the facility. We are committed to seeing 
that facility built. 

Congress did not provide all of those funds that we had asked 
for. That was a decision made by the Congress. We respect that de- 
cision. But we will be back again in fiscal year 1995 asking for 
money so we can have that facility built. 

You have our commitment that we will work with you to ensure 
that we do not in any way have a delay in the construction of that 
much-needed waste water treatment facility. 

As to the broader question you ask about what assurances do you 
have and do all of us have in terms of the future, the structure as 
it relates to the environment is one that I believe is very important 
in terms of building assurances for the future. 

It is not purely a political structure. It is not just the environ- 
mental ministers. It is the public. It is an independent secretariat. 
It brings together such a large number of people who care about 
these border issues, who care about seeing the infrastructure con- 
structed, that I have had great confidence that it will endure re- 
gardless of who sits in my job in the future or who sits in the 
White House in the future. 

Ms. SCHENK. I guess it is a difference of confidence that we are 
coming down to. 

Ms. Browner. But we have to start somewhere. The alternative 
in dealing with these border issues is to not have a comprehensive 
plan, to not have a North American Development Bank, to not have 
the commitment of the Mexican government that we currently 
have. 

To vote against NAFTA, to reject NAFTA is to set aside the op- 
portunities that we have created and the responsibility to deal with 
these problems. We now have a comprehensive package, almost $8 
billion for dealing with the border problems. 

Without NAFTA, we wouldn't have that and you and I will con- 
tinue in our struggle to get the $60 million or $70 million for Ti- 
juana and all the other communities I work with across the border. 

I think that the North American Development Bank and the 
other funding opportunity created by NAFTA are too significant to 
walk away from. 

Chairman Studds. The gentleman from Maine. 

Mr. Andrews. Thank you, Mr. Chairman. Thank you both for 
coming. I think this is one of the first issues that I can think of, 
one of the few certainly in which I have been on the fence, particu- 
larly on this late stage of the game. Leave it to me to choose a 
barbed wire fence to be on. There are two very significant things 
we are discussing here and why this agreement is so significant. 

One is the tremendous opportunity for the public to be involved 
in an unprecedented trade issue. I have never seen the public as 
aware and as involved in a trade issue as this. I think that is all 
very exciting and all very much to the good. 

Secondly, I agree that this is important because it is precedent- 
setting. We are going to set the standards with this agreement 
with Mexico for future trade agreements with Latin America and 
South America. So with respect to the hemisphere, this is an ex- 
tremely important agreement. I would like to ask Mrs. Browner a 
question relating to something we have discussed personally. 



38 

In fact, I received some correspondence from your general coun- 
sel in response to this. Maine has some of the strongest environ- 
mental laws in the United States. We have a strong environmental 
ethic and we are very proud of that. 

I ask a question relating to the question Mr. Hamburg raised 
about whether or not we would have the right to maintain that 
strong environmental ethic. I asked specifically about our law ban- 
ning aseptic packaging for environmental reasons. You were kind 
enough to have an opinion written to me by your counsel. 

But it raises a question and this is it: Your counsel suggested 
that because our law meets a legitimate objective, as he describes 
it, and does not constitute arbitrary or unjustifiable discrimination. 
He goes on to say that this, our law, therefore, "appears to be al- 
lowable under and consistent with NAFTA." 

So, obviously, in his opinion it is allowable and consistent. 

Therefore, it is arguable whether someone else might agree, for 
someone else on the other side, perhaps Mexico, who wants to sell 
a aseptic packaged products to Maine, it may not appear to be al- 
lowable. In that case, if they raise the question about this, raise a 
complaint, say this is an unnecessary obstacle to trade, then there 
would be a panel that would, a five-member panel, as I understand 
it, that would be reviewing this case. 

You mentioned how the NAFTA provides public participation. 
You mentioned the Commission for Environmental Cooperation, 
the Council for Environmental Ministers, the Advisory Committee 
on the Environment, all of which is going to have full public par- 
ticipation. 

But my question has to do with this five-member panel who will 
arbitrate whether or not Maine can maintain its environmental 
law. 

My understanding is, and please correct me if I am wrong with 
this specific point, that that panel has the right to ask for any envi- 
ronmental or any other expert advice on which to base their opin- 
ion. They have the right to ask for that. 

But under NAFTA citizens have no right to provide testimony, 
to submit documents, to review the documents on which this 

Eanel — none of which may have any environmental expertise — will 
ase their decision. They don't even have the right to submit docu- 
mentation. 

That includes the Attorney General of the State of Maine if he 
were to want to have full access to the process and documentation 
and have the right to make our case as a State before NAFTA, he 
wouldn't have the right to do any of those things. 

If the panel happens to ask for it, yes. But under the terms of 
the treaty he would have no right to make that case, even to re- 
view the documents. Is that correct or not? 

Ms. Browner. You raised several issues. 

First of all, I think it is important to understand that the rules 
of procedure related to the five member panel have not yet been 
written and that both Ambassador Kantor and I and this adminis- 
tration are fully committed, as we said earlier, to be sure in every 
instance there is public transparency and access. We believe there 
will be opportunities when the panel looks to experts to make sure 
someone like your Attorney General is brought into the process. 



39 

As we develop the rules of procedure, we will certainly seek to 
be clear on that point. The other issue you make in reference to 
the memo that we provided to you from our general counsel. I 
apologize, I don't know if you are a lawyer 

Mr. Andrews. I am not a lawyer. 

Ms. Browner. Good for you. I can say that being a lawyer. But 
lawyers have this really annoying habit of never wanting to say 
categorically yes or no. I think the language you have before you 
is a yes in lawyer-speak, if you will. In other words, the law that 
Maine has undertaken to pass which, as I understand it, the ban 
on aseptic packaging, was related in Maine's view to recycling is- 
sues, to landfill to waste disposal issues, to waste minimization, all 
issues that properly fall within the jurisdiction of a State and all 
issues which the State is absolutely, I believe, able to make deter- 
minations about to see that their resources and their citizens are 
protected. 

We provided that letter to you in an effort to clarify and my read- 
ing of the letter is that it would be virtually impossible for another 
country to challenge. This is not a Federal law, but something 
Maine has done to deal with a situation that Maine found unac- 
ceptable, that that law would withstand any challenge. 

Mr. Andrews. Let me conclude by saying I appreciate that re- 
sponse and I appreciate your commitment and the administration's 
commitment to the environment. But as someone who is not com- 
mitted, I fmd it disconcerting to know that this agreement does not 
cover rulings of procedures. We don't have a guarantee that our At- 
torney General and our people will have access to the documents 
and the procedures by which this critical decision can be made, nor 
do we have the right under the existing agreement to make our 
case. 

Ms. Browner. I think you have a commitment from this admin- 
istration that when the rules of procedure are written which are 
appropriate after the agreement is passed by this body, that we 
will at every turn seek to expand public participation and public 
transparency in the NAFTA process. 

Chairman Studds. The gentlewoman from Washington. 

Mrs. Unsoeld. I am sorry the Ambassador had to leave because 
I would have liked to have told him in person how much I appre- 
ciate his tough negotiating capability in all kinds of areas. 

I have no doubt that had he had the team he had sitting beside 
him this morning here in the initial negotiations, we would have 
had something very different because you are a whale of a good 
team. 

You have heard others express the agony that many of us are 
feeling as we approach this issue. I do believe that because of our 
relationship and proximity with Canada and with Mexico that 
there would be a life after — a new negotiation process possible. 

Be that as it may, part of the tough negotiating that the Ambas- 
sador was able to include was the protection of intellectual prop- 
erty rights. It is something comparable for natural resources that 
I would like to have seen and hope to see in future agreements 
really strengthened because I feel that our trade agreements are 
the only tool with which I am familiar to insure the protection of 
natural resources for future generations. 



40 

There are not any forests on Mars. There are not any fish. There 
are not any marine resources. We have to make do with the ones 
that we have here. 

Although the Ambassador spoke quite emphatically about there 
being no difficulty with NAFTA, I think there are differences of 
view and also with the relationship between NAFTA and GATT as 
to what is enforceable and what is not. 

I would have liked to have asked him whether sanctions punish- 
ing the production and process methods and actions in inter- 
national waters would survive a challenge because I think there is 
some evidence that they would not. I don't believe we have that 
sufficiently clarified. 

Secretary Babbitt. Congresswoman Unsoeld, I think there is a 
very important point here. I direct this response to the Congress- 
man from Maine, as well in absentia. 

In any conceivable scenario relating to challenges of environ- 
mental laws, whether they are packaging laws in Maine or re- 
source laws in the State of Washington, NAFTA in its current form 
gives more protection than we have now. 

The reason for that, in every single case without exception is 
this: Mexico, at the present time, can mount a challenge under the 
GATT in any of these areas and by any measure there are fewer 
processes, transparency and other protections under the GATT 
without any exception whatever. 

We have seen that in tuna/dolphin and many other cases. How- 
ever, we may interpret the specific provisions of the NAFTA draft 
with whatever ambiguities, the transparency and the process and 
the chances for the American position to prevail are vastly greater. 

If Ambassador Kantor takes this agreement into the GATT nego- 
tiations, we will have a double win. We will have the benefits of 
NAFTA which advances over the current position and we will have 
a chance of renegotiating the agreement. 

Mrs. Unsoeld. I agree with you if these concepts can be taken 
into the GATT. I have been told by representatives of the adminis- 
tration that the Uruguay Round is too far advanced to bring up the 
issue that most concerns me and that is: "How or whether we will 
be able to use our trade agreement as a tool to enforce sustainable 
management of resources in international water." 

Specifically, how in the Donut Hole we would be able to have an 
international, enforceable agreement on the management of pollock 
when we have had eight international agreements to try to arrive 
at a management scheme. But there is no tool. There is no ham- 
mer. There is no leverage. 

Secretary Babbitt. I understand. We have had this discussion 
many times. I challenge you to tell me how backing away from 
NAFTA improves our ability to reach the goals we all share and 
that this administration is committed to. 

Mrs. Unsoeld. The provisions of NAFTA, as I see them in 
NAFTA and GATT, is that they will make it more difficult because 
it lays aside areas where we cannot be enforcing. It will make it 
more difficult and it will not give us a handle to have those inter- 
national negotiations. 

Ms. Browner. This may not be an absolute solution, but I think 
you have to agree this is a significant step forward. 



41 

Mrs. Unsoeld. I completely agree with you on that. 

Ms. Browner. If Ambassador Kantor was here, I know he would 
say that it establishes a threshold for GATT so that when we in 
this administration finally get to negotiate a trade agreement that 
is completely ours, that has not been started by a prior administra- 
tion, the threshold for environmental issues has been raised and 
we begin with a new floor. 

If we are not able to demonstrate a commitment in this country 
to the joining of trade and environmental issues, then we will not 
enter the GATT negotiations at that new floor. I think it is a fun- 
damental step forward that we have available to those of us who 
care about environmental issues, who care about protecting our 
natural resources. 

Mrs. Unsoeld. I give you full credit that you have improved 
what was unfortunately a fatally-flawed document. 

Mr. HOCHBRUECKNER. (Presiding) The gentlemen from North 
Carolina, Mr. Taylor. 

Mr. Taylor of North Carolina. I appreciate the Secretary's 
passionate speech about building the economy in Mexico. I wish I 
could get him to speak as passionately for America's workers in 
places where some of our questionable environmental laws are kill- 
ing jobs and causing problems. 

I see the environmental concerns in Mexico as very real, as Ad- 
ministrator Browner said a moment ago. With raw sewage being 
burned in the street and water being taken from just ground 
sources — those are real environmental problems. 

Here we struggle with things like taking tens of thousands of 
people's property for the kangaroo rat. 

I want to ask this specific question, Mrs. Browner. Our folks are 
very concerned. We are losing a considerable amount of our apple 
crop this year because of the Delaney clause and a last minute no- 
tice about a fungicide that was being used on the apples. 

Will the Mexican fruits and vegetables be subjected to the 
Delaney Clause or any of our other environmental laws? 

Ms. Browner. Absolutely. I think, as you know, we have been 
sued and are in Federal Court over our interpretation of the 
Delaney Clause. 

The administration has called for changes in the food safety laws 
of this country, both FIFRA and FFDCA. We want to address the 
concerns that have been raised. But any law relating to pesticide 
use in this country in terms of residuals that are left on the fruits 
and vegetables must be met by Mexico. 

So Mexico would not be able to ship into this country something 
that has been banned for use in this country if it leaves a residual 
on that fruit or vegetable which is the very point that you raise. 

Mr. Taylor of North Carolina. How will we enforce that? 

Ms. Browner. Food and Drug Administration has enforcement 
powers along the border both with Canada and Mexico to inspect 
shipments of fruits and vegetables and other food products. 

I don't want to speak on their behalf, but we have been in con- 
versations with them about how to ensure that we are getting the 
inspections done in a way that is absolutely essential to seeing our 
laws enforced. 



42 

Mr. Taylor of North Carolina. Will we have on-site Mexican 
farm inspections? It is impossible to inspect every piece of vegeta- 
ble that comes in. 

Ms. Browner. Again, I don't want to speak for the Food and 
Drug Administration. We will be happy to get an answer to this for 
you and submit it in writing. 

As I understand it, right now the inspections of the foods product 
are done as they come to the border and they are done similarly 
to the way the inspections are handled in the United States. 

As you know, not all inspections are on-farm inspections in the 
United States. 

Mr. Taylor of North Carolina. Will that be the same for our 
endangered species law? 

Will they be required to follow a law similar to the one that we 
have to follow regarding endangered species? 

I am not talking about pesticides here. I am talking about use 
of land and how we will enforce that. 

Secretary Babbitt. Mr. Taylor, the law does not literally call for 
the enforcement of the American Endangered Species Act in Mex- 
ico, obviously. But there is a great deal of overlap for a number of 
reasons. One is the CITES treaty which has an internationally-de- 
fmed set of endangered species with corresponding sanctions and 
obligations. 

There is the Wild Bird Protection Act, which this Congress 
passed I believe two years ago, which has some rather stringent 
protections that reach beyond the border into the management of 
those wildlife resources. 

So I think a general answer to your question is that while there 
is not a mandate for a literal mirror image enforcement, a great 
deal of these concepts are now being carried through with binding 
consequences and enforcements provisions. 

Mr. Taylor of North Carolina. I would ask one other question 
and if you cannot answer it, you can do it in writing. In the side 
agreements on page 32 in section 14, Part 1 and Part 5, the defined 
term "environmental law" does not include any statute, regulation, 
or provision of the primary purpose, which is managing commercial 
harvests or mineral exploration, et cetera. 

Is that an exemption of the environment laws in the area of agri- 
culture? Am I reading that wrong? What does that mean in the 
side agreement? 

Ms. Browner. I apologize I don't have a copy of the side agree- 
ment in writing in front of me. We will certainly get you a full an- 
swer in writing. But I want to be clear that the pesticide laws and 
we have looked at this question many, many times, that the pes- 
ticide laws of this country will absolutely apply to food products en- 
tering this country. 

Mr. Taylor of North Carolina. Thank you both. 

Mr. HOCHBRUECKNER. The gentleman from Mississippi, Mr. Tay- 
lor. 

Mr. Taylor of Mississippi. I regret Ambassador Kantor left. It 
is interesting that both he and the members of the panel said all 
five living Presidents support NAFTA. 

For the record, I would like to have it noted that the Bush ad- 
ministration had a $362 billion dollars trade deficit. The Carter ad- 



43 

ministration had a $99 billion trade deficit. The Ford administra- 
tion actually had a $2 billion trade surplus. The Nixon administra- 
tion broke even. The Reagan administration had a $736 billion 
trade deficit and through the first eight months of his administra- 
tion President Clinton has a $77 billion trade deficit. 

I think holding these people's administrations up as models of 
successful trade policy is much like holding Madonna up as a 
model of abstinence. 

Since the case was brought by Mr. Tauzin involving the 
shrimpers, I will use the shrimpers of the Gulf Coast as a micro- 
cosm for American industry. 

In order for a shrimper to have access to the American market 
he has to have insurance to cover his people per the Jones Act. He 
has to pay workmen's compensation; he has to pay minimum wage. 
He has to live by OSHA. He has to live by the Oil Pollution Act. 
He has to live with the Clean Air Act. He pays a tax on diesel fuel. 
He has to live with Coast Guard inspections. 

For all of that he gets to sell his product here. But if he brings 
his boat to Mexico, he doesn't have to do any of these things and 
with NAFTA and even with the present trade laws he gets equal 
access to our markets. 

There is a law on the books right now, and I am sorry Mr. 
Kantor isn't here, Public Law 102-162 that bars the importation of 
shrimp from countries that do not use devices to protect the tur- 
tles. It is on the books right now. 

By your admission and Mr. Kantor's admission, you are not en- 
forcing that law right now. That is American law. 

Our President is in charge of the Customs Service. Our President 
appointed the Attorney General. You won't even enforce American 
laws now that look out for the environment but you give the lame 
excuse that, well, if we get NAFTA maybe we will enforce them 
then. 

I just don't buy that. You are saying, by the way, if we give up 
what is left of our American manufacturing base maybe we will en- 
force the environmental laws. That is a weak argument. 

The next argument says if we get NAFTA we will clean up the 
sewage treatment plant in Tijuana. Folks, there are sewage plants 
in places like St. Martin in Biloxi, Mississippi that are not being 
upgraded for lack of Federal funds. 

I would dare say that those people would much rather see Back 
Bay, Biloxi cleaned up so it can be useful for harvesting oysters, 
again with their tax dollars, than a plant in Tijuana. 

So I quite frankly begin to wonder why you two very capable peo- 
ple who are paid pretty well by the American taxpayers and why 
the man living in the large White House down the road is spending 
so much time calling Members of Congress, cutting deals to get 
them to vote for something you say will help the environment when 
we have laws right now to help the turtles. They say you can't 
bring in shrimp from those countries that don't use turtle excluder 
devices that you won't enforce now. 

Ms. Browner. Mr. Taylor, several points. This administration 
has called for a reauthorization of the Clean Water Act. We have 
called for more money to be made available to all communities 



44 

across the country. I know this is not an issue that comes before 
this committee on a regular basis. 

Mr. Taylor of Mississippi. It is only five minutes, Mrs. 
Browner. Why don't you address my question? 

Ms. Browner. You raised the point that this administration was 
not helping the people in your district when it came to clean water 
and drinking water. I am telling you that we are. We have asking 
the Congress to change the law to provide flexibility and to provide 
resources to local communities across the country so they can com- 
ply with the Clean Water Act so we can protect our nation's water 
resources and so that we can provide drinking water. 

No administration in the history of this country has called for 
money for local communities to comply with the drinking water 
^i"3nci 3.1*0. s 

On the issue of the turtles which you raised, as I understand it 
and I don't want to speak for the Trade Representative, these are 
issues that you deal with across countries that fall more properly 
within his jurisdiction and the United States Department of Com- 
merce jurisdiction. 

As I understand the situation, these complaints that you raised 
about failure to enforce the laws 

Mr. Taylor of Mississippi. That you agree have been taking 
place. 

Ms. Browner. — have been raised in prior admmistrations 
through the legal channels. To date this has not been done in this 
administration. I am explaining the situation we find ourselves in. 
There is a process here. This administration has clearly dem- 
onstrated on more than one occasion that we are going to enforce 

If you look at the actions taken by the Secretary of Commerce 
since the first day he was in office to see that these situations were 
remedied, this particular one, the turtle excluder device, is not in 
that process. 

I apologize for not being an expert on this. It was rejected. 

Mr. Taylor of Mississippi. Why doesn't he enforce the law we 
have? 

Ms. Browner. Well, the law we have in terms of— and I don't 
want to speak for the Trade Representative. 

Mr. Taylor or Mississippi. Speak for the administration. 

Ms. Browner. We are absolutely committed to seeing environ- 
mental laws enforced. 

Mr. Taylor of Mississippi. Why don't you enforce the law? 

Ms. Browner. As I understand the process where we find it, it 
is not available to us at this time and I assure you when it becomes 
available we will act to make sure the environment is protected. 

Mr. Taylor of Mississippi. The law is on the books, Mrs. 
Browner. 

Ms. Browner. We don't disagree with you. 

Chairman Studds. (Presiding) The time of the gentleman has ex- 
pired. The Chair will have to inform members. First of all, the 
long-suffering, surviving members of this panel must leave at 
12:30. There are also constraints on the members of this commit- 
tee, given our obligations. We have a second panel from whom we 
want to hear. 



45 

Mr. Laughlin. I am sorry the Trade Representative is not here 
because we always hear that all the NAFTA is designed to do is 
help Wall Street and big business. I have no big business in my 
district. I want his observation why because the small businesses 
in the 14th district of Texas are gaining jobs. 

To give you one example, two weeks ago I was at five small busi- 
nesses in a town of less than 6,000 people and four out of the five 
were adding jobs if NAFTA passes, the fifth said there are no tar- 
iffs on coat hangers and they signed a contract two months ago 
that caused them to add 20 people because of the big contract they 
signed with some Mexican company for which they manufacture 
1,500,000 coat hangers per day in this little town. 

Having said that about small business, I wanted to ask, we hear 
horror stories from Members of Congress from the Midwest of this 
country who go to the Mexican border. In fact, my Governor Rich- 
ards said with some disgust that they acted as if they discovered 
for the first time that there was poverty in Mexico and what hor- 
rible conditions. 

It is true that there is poverty in Mexico and it is true that they 
have environmental problems, particularly those on the Rio 
Grande. We have heard rumors that President Salinas has closed 
down all of the asphalt plants in the Federal district of Mexico and 
has done other things. 

Others asked what is going environmentally if this passes. My 
question is what is going to happen environmentally in the Mexi- 
can border area of my State of Texas which has the longest border 
of any State. Of all these States that are worried about Canada 
and Mexico, we are worried, too. What is going to happen to the 
people that live along there if we don't pass NAFTA from an envi- 
ronmental viewpoint? 

Ms. Browner. Two things: First of all we will not have a com- 
prehensive mechanism for providing infrastructure, waste water 
treatment, drinking water and waste disposal facilities for the peo- 
ple of your district and the people who live a long the border. 

NAFTA has created an opportunity to put in place a comprehen- 
sive program, money to back that program up to provide these 
services. We have received a commitment from the Mexican gov- 
ernment dollar for dollar to deal with these problems. 

I also think it is important to understand why these problems 
arose. They arose in large part because of the maquiladora pro- 
gram. Companies went to the border. There was an explosion in 
growth along the border. 

With NAFTA, the incentives for development along the border 
decrease dramatically. You will not continue to have that the explo- 
sion of growth and so you will have the ability to continue deal 
with the problem. 

If we continue the maquiladora program, if we continue this ex- 
plosion of growth we will always be playing catchup and we will 
always have American citizens living without water they can drink 
or without a place to get rid of their waste. 

Mr. Laughlin. I have been told the Mexican government is actu- 
ally putting money in to clean up there. A question by one of the 
previous panelists on my side of the table indicated that perhaps 
the Mexican government was not putting any money in, perhaps 



46 

we were putting all the money in and it was neglecting areas of 
the United States. Can you shed some light on that? 

Ms. Browner. You are absolutely right. The Mexican govern- 
ment is putting money into dealing with these issues. They have 
made a dollar-for-dollar commitment, $1 billion over four years. In 
addition to that, they just received a World Bank loan of approxi- 
mately $1.8 billion which they indicate they will match for a total 
of between $3 and $4 billion. To suggest that the Mexican govern- 
ment is not putting money into dealing with these problems, I 
would agree with you, is inappropriate and not accurate. 

Mr. Laughlin. If we don't have the NAFTA talks taking place 
from the past to now and if NAFTA fails what are the pressure or 
incentives on the Mexican government to move forward with clean- 
ing up the border area, not just in Texas but New Mexico, Arizona 
and the Tijuana situation that we have seen so much about on the 
news. 

Ms. Browner. As I said before, I think that if we are to reject 
NAFTA in this country, it will set back our relationships with Mex- 
ico in a significant way. The EPA works closely with our counter- 
part in Mexico, Satersol. We want to continue to be able to do that. 
We want to build on the work to date. 

We see tremendous opportunities created with NAFTA and I am 
not sure those opportunities will continue to exist if we respect 
NAFTA. I have heard this from my counterpart in Mexico that they 
are concerned about their ability as the leaders of that country to 
continue the relationships with us in any way similar to what we 
already have. They want to move forward. 

Mexico does have a relatively new environmental program. We 
would not suggest otherwise to you. That v-ould not be true. It is 
a program about five years old. Our program in this country is 
about 25 years old. But they wanted to learn from our experiences. 

President Salinas said to me, we hope to leapfrog you in dealing 
with environmental issues. NAFTA gives us that opportunity to 
work together to solve these problems. 

Mr. Laughlin. I agree with your assessment. Many of the citi- 
zens I represent who live very close to the Republic of Mexico share 
your assessment. This would be a tremendous setback in our rela- 
tionship with a very close neighbor. 

Thank you. 

Chairman Studds. Mrs. Browner and Secretary Babbitt, we 
thank you for your passion, your eloquence, your patience and your 
endurance. You are relieved or liberated. 

Thank you. 

We will go as quickly as possible to the next panel. 

Let me describe our situation. We obviously had no way of antici- 
pating the length of the first set of questions for the representa- 
tives of the administration. It went substantially longer than we 
had thought it would. We are operating under the most severe time 
constraints with a possibility of a vote on the Floor at any moment. 

I apologize to the members of this panel. Here we have a reflec- 
tion of the diversity of the environmental communities in the coun- 
try who will share their views on the merits of NAFTA. 

It is my fervent hope that at the very least we will be able to 
have you each get your testimony in the record orally. We will ask 



47 

you to limit your oral testimony to five minutes: We hope there will 
be time for questions. 

It is essential, vote or no vote, that we clear the room by 1:00. 
I apologize. I know there are strong feelings here. 

We will call first on Barbara Dudley speaking for Greenpeace. 

STATEMENT OF BARBARA DUDLEY, EXECUTIVE DIRECTOR, 

GREENPEACE 

Ms. Dudley. Thank you Chairman Studds and members of the 
committee. 

I would like to begin with Ambassador Kantor's comment about 
let's not let perfect become the enemy of good. We feel strongly at 
Greenpeace that we can do much better than this NAFTA. 

We have yet to hear an argument from the administration about 
why we cannot go back to the drawing board and do a better trade 
agreement. We think that it is possible to get a good trade agree- 
ment that is good for the economies of all three countries and good 
for the environment. 

The European Community has begun a process of economic inte- 
gration that takes into account the need for a cohesion fund that 
is a compensatory financing scheme to help those countries which 
have lower economies, lower standards of living and lower environ- 
mental standards than the other countries. 

We could do the same here. We have to do the same here if we 
are going to make any real impact upon improving the economies 
of either the United States or Mexico. 

In saying that, I very much want to distance Greenpeace from 
the kind of nativism and Mexico-bashing that some of our bed- 
fellows have engaged in in this debate. We do not believe that what 
is wrong with this trade agreement is Mexico. We think what is 
wrong with this trade agreement is that it is trickle-down economic 
policies and trickle-down environmentalism. 

If some people in Mexico become richer, be they Americans, Ca- 
nadians or Mexicans, somehow the benefits of that will trickle 
down to the people who work for them and will trickle down in the 
form of improved environmental policies and the money to enforce 
those policies. We did not see that happen in the 12 years of trick- 
le-down economics under Reagan and Bush. 

There is no reason to think that enshrining those policies in this 
trade agreement, which is Mr. Bush's trade agreement, is going to 
get us any further in protecting our environment or Mexicans's en- 
vironment. 

Mexico is not the problem and the border is not the problem. The 
border is a symptom of the problem. It is a symptom of deregulated 
trade. It is a symptom of what happens when environmental regu- 
lations are lifted as barriers to trade because that is what the 
Reagan administration was all about and that is what we would be 
buying into again with this trade agreement. 

There is nothing in the side agreements that cures the fun- 
damental problems with this NAFTA. The side agreements do 
nothing to protect green procurement policies. They do nothing to 
protect green subsidies. They do nothing to protect local and State 
laws. 



48 

What Mrs. Browner said was absolutely incorrect. There was 
nothing in the side agreement that protects Maine's laws or any 
other State's environmental laws from an attack as an unfair trade 
practice, nothing. That will go to a dispute panel. Unless that dis- 
pute panel finds those packaging laws are based on sound science, 
and we all know how arbitrary a concept that is, then they will fall. 

There is nothing in the side agreement that says an3rthing other 
than that each country has to enforce its existing environmental 
laws and regulations. They can change them. They can lower the 
floor. They can raise as a defense the fact that they had to be en- 
forcing other environmental laws elsewhere because they were 
more important; certainly a claim that any one of our environ- 
mental agencies could make at any moment in time. The Commis- 
sion will take forever to reach any kind of agreement that anybody, 
any country has not been enforcing its laws. If they should find 
that, who pays? Not the companies doing business, not the compa- 
nies doing the polluting, but the country. 

There is something fundamentally wrong with the way this trade 
agreement is put together. I felt that listening to Carol Browner 
claiming that if we pass NAFTA, as flawed as it is, it will give us 
a new floor in environmental standards when the Clinton adminis- 
tration goes into negotiate the trade agreement which is GATT. 

This is the Uruguay Round of GATT that started in 1986. This 
belongs less to the Clinton administration than this NAFTA does. 
It is already an abomination and it won't get better. We have to 
get back to the drawing board and start over if we are serious 
about the claims we made for protecting environmental standards 
in this country and in Mexico. 

[The statement of Ms. Dudley may be found at end of hearing.] 

Chairman Studds. Thank you. Mr. Pope speaking for the Sierra 
Club. 

STATEMENT OF CARL POPE, EXECUTIVE DIRECTOR, SIERRA 

CLUB 

Mr. Pope. Mr. Chairman, in the interest of time I will not say 
the things I wanted to say about the good work of the committee 
over the years. I want to focus on a few points because your time 
is very limited. 

You have heard a great deal of controversy this morning, and as 
you have been lobbied, over the impact of this agreement on var- 
ious aspects of American law. I think it is fair to say that in many 
areas it is ambiguous as to what this agreement will actually do 
to American law. 

The difficulty with that ambiguity, I would point out, is that at 
the present time the United States is in a position to determine 
what the impact of international agreement will be on its laws and 
under this agreement. If Congress were to ratify it, we would be- 
come minority shareholders in making that decision. 

As Secretary Babbitt said, this is a large agreement with a large 
and broad atmospheric effects on our relations with Canada, Mex- 
ico and the rest of the world. This is a 2,000 page agreement for 
a reason: the details matter. 

Things which are in this agreement are in this agreement for a 
reason. Things which are not in this agreement which the United 



49 

States asked for are not in this agreement for a reason and that 
reason is that other parties to the agreement did not want them 
there. 

I think this is one of the things there is no dispute about. You 
have heard that this agreement does not establish the right of the 
United States to exercise outside of certain narrowly-defmed inter- 
national agreements extra territorial environmental protection for 
the worlds oceans and fisheries. 

You have heard, and I don't think this is in dispute, that the Ma- 
rine Mammal Protection Act, driftnet rules and the bluefm/tuna 
rules all would be subject to challenge under this agreement as 
presently written. 

You also heard that while the administration believes that the 
solutions to that problem may lie somewhere else, perhaps in sub- 
sequent negotiations with Canada and Mexico, perhaps in subse- 
quent negotiations of GATT, that this administration does not plan 
to insist that this issue be resolved before it brings the Uruguay 
Round back to this Congress for decision. 

I would submit that the most important change which the ratifi- 
cation of this NAFTA will make in the status of American environ- 
mental law is that today the oceans are off limits and the Canadi- 
ans have made it very clear to the Sierra Club that that is one of 
the things they want from this agreement to stop the United States 
from being an imperialist on the world's ocean; that this claim 
which has been developed by the GATT, by GATT panels and par- 
ties appearing before GATT have been endorsed by the United 
States Congress. 

At the present time, all these theories which we are all debating 
about their implications have not been endorsed by the Congress 
of the United States. If the Congress ratifies this agreement with 
the full knowledge that the kind of laws which this committee has 
passed are not protected by this agreement; are subject to chal- 
lenge under this agreement; are being left to the evolution of GATT 
jurisprudence, and will not be made a precondition for resolution 
of the Uruguay Round, then in that the Congress will have ceded 
to those who argue that the United States ought not to have the 
right to insist on enforcement of environmental standards on the 
high seas, the high ground and the probability of the eventual vic- 
tory. 

I believe there is no sector of the American economy that is more 
likely to be directly and negatively impacted by the ratification of 
this treaty than the American fishing industry for this reason. 

I also want to say that this committee has to look beyond the 
question, what happens if NAFTA fails? The perfect can indeed be 
the enemy of the good: I would say the inadequate can also be the 
enemy of the adequate and that the United States has tools avail- 
able to it to pursue the environmental goals which it would give 
away by ratifying this agreement and that is am important thing 
you must look to. 

[The statement of Mr. Pope may be found at end of hearing.! 

Mr. Studds. Next, Mr. Schlickeisen, speaking for Defenders of 
Wildlife 



50 

STATEMENT OF RODGER SCHLICKEISEN, PRESIDENT, 
DEFENDERS OF WILDLIFE 

Mr. SCHLICKEISEN. Thank you, Mr. Chairman. 

I will focus on the issue we believe is the major remaining flaw 
in NAFTA, This is its failure to meaningfully address the problem 
of trade measures and sanctions based on production and process 
methods, PPMs. I am sorry that your committee is gone. I hope 
their staffs are here. I especially hope the 14 staffers are here rep- 
resenting the Members who are undecided because there is a lot 
of misinformation in the administration's testimony. 

I am not sure it was purposeful, but Ambassador Kantor mis- 
represented this issue terribly two times and the only one who was 
correct was Administrator Browner, although she put a positive 
twist on it. 

This is a matter where the facts can be drawn out. 

The problem is that trade law, as represented by GATT jurispru- 
dence and the NAFTA text, does not recognize import restrictions 
based on how a product is produced. The most notorious example 
is a 1991 GATT panel decision, which decided that the U.S. could 
not restrict the import of Mexican tuna based on Mexico's high 
rates of dolphin mortality. The GATT panel reasoned that unless 
the tuna itself causes harm, the U.S. cannot legally restrict its im- 
port. Whether serious environmental damage is done is "trade ir- 
relevant." From an environmental perspective, the ramifications 
are disastrous. Given that Mexico initiated the GATT action, 
NAFTA is the ideal vehicle to make progress on PPMs. If the U.S. 
cannot get movement on PPMs in NAFTA, we are naive to believe 
we can make progress in GATT. We must gain inclusion in the 
NAFTA package, perhaps in a U.S. executive order and Mexican 
side letter, of the common sense principle that trade restrictions 
applied equally to all countries are acceptable mechanisms to pro- 
tect the world's living natural resources. 

In reaction to the GATT panel decision, in August 1992, by a 
vote of 362-0, the House passed H. Con. Res. 246 stating that the 
Congress in the future would not pass any trade agreement that 
jeopardizes environmental laws. And even GATT, before the con- 
troversial tuna/dolphin decision, recognized the importance of pro- 
tecting the environment and natural resources in Articles XX(b) 
and (g). 

However, the NAFTA text essentially endorses Mexico's GATT 
complaint. While Article 904 protects environmental laws with a 
"legitimate objective," 907 and 915 both work to exclude PPM- 
based laws. And Article 2005 specifically permits Mexico and Can- 
ada to bring a GATT challenge if a U.S. law seeks to protect a re- 
source outside our territorial jurisdiction. 

Ambassador Kantor did not correctly answer Mr. Tauzin's ques- 
tion on that. 

This means that many U.S. laws could be successfully challenged 
under NAFTA. Examples include the: Marine Mammal Protection 
Act, Endangered Species Act, Wild Bird Conservation Act, Pelly 
Amendment, High Seas Driftnet Enforcement Act, Lacey Act, Sea 
turtle measures in the 1989 Commerce Appropriations Act, Magnu- 
son Fishery Conservation and Management Act, Atlantic Tunas 
Convention Act. 



51 

The result could be that while we would be able to maintain our 
trade sanctions and continue to protect for everyone the world's liv- 
ing resources, we could only do so if we pay: first, by watching our 
domestic producers struggle under a continuing competitive dis- 
advantage; and second, by accepting off-setting trade sanctions in 
some other area. This makes no sense. The key question is: How 
can the House approve a trade agreement which does on PPMs ex- 
actly the opposite of what the House called for by a 362 to zero vote 
only last year? And how can it do this when the Nation that caused 
the House to pass that resolution is the very nation that stands to 
benefit the most from the agreement? 

We believe the answer is that the House cannot approve the 
agreement as it now stands — at least not if it expects such resolu- 
tions to be regarded as anything other than "paper tigers". What 
are we to say to the next trade agreement? That we didn't mean 
it on NAFTA, but we do now? Do we think the GATT parties will 
interpret our approval of NAFTA as a demonstration of how seri- 
ously we regard the PPM issue? H. Con. Res. 246 states that "The 
Congress will not approve legislation to implement any trade 
agreement (including the Ururguay Round of GATT and the United 
States Mexico Free Trade Agreement), if such agreement jeopard- 
izes United States . . . environmental laws . . . . " But that is 
exactly what NAFTA does. If Mexico agrees with the principle that 
is at issue, then this can still be resolved. Our recommendation is 
that Mexico state its agreement, and join the U.S. in a moratorium 

on bringing PPM challenges in NAFTA and GATT relating at 

least to living natural resources — until such time as sufficient cri- 
teria for judging these laws are established either in the NAFTA 
or the GATT. 

Administrator Browner pointed out that they are going to start 
talking about this soon. They can talk with a purpose if there is 
a moratorium. 

On the other hand, if Mexico continues to disagree with this 
principle — and therefore refuses to take this simple step — ^then it 
is not a suitable partner in a trade agreement that promises, by 
its very nature, to increase the kind of trade that puts the world's 
living resources at greater risk. I would also point out that this 
simple step is one that can be taken instantly. There is no reason 
it cannot be done today or tomorrow. 

Mr. Chairman, I hope you and the other 13 undecided Members 
will at least extract that from Mexico and the administration if you 
decide to support the agreement. You have done a lot of good work. 
I hope you will protect it. 

[The statement of Mr. Schlickeisen may be found at end of hear- 
ing.] 

Chairman Studds. Your written statement says we remain one 
of the few environmental groups uncommitted on the pact. You 
could have fooled me. 

Mr. Schlickeisen. If you could get this problem out we could en- 
dorse it. 

Chairman Studds. Dr. Hair. 



52 

STATEMENT OF JAY HAIR, PRESIDENT, NATIONAL WILDLIFE 

FOUNDATION 

Dr. Hair. I will be very brief with the understanding that my 
written comments will be in the testimony. The National Wildlife 
Foundation has been working diligently and hard for four years on 
trade and environment. 

Is NAFTA perfect from an environmental perspective? Of course 
not. 

Is NAFTA a significant step forward in terms of the deplorable 
status quo? It is light years ahead. 

Many of my colleagues refer to some of the benefits from the ne- 
gotiation process for dispute resolution in the GATT. I would re- 
mind this committee that there is not one place, not one mention 
of the word "environment" in the GATT. 

Many of our problems now with trade are the result of there 
being no sensitivity about environmental issues in the GATT. The 
word "environment" is listed substantively in over 100 places with- 
in the NAFTA documents. 

The environmental groups who continue to oppose NAFTA de- 
spite what I think are its clear objective and obvious benefits argue 
that the passage of the agreement will compound our environ- 
mental problems. I cannot say it any more clearly; they are simply 
wrong. 

The truth is these organizations will never be satisfied with this 
or any other trade agreement. They will continue to raise the bar 
for environmental expectations even higher. Their goal is not to re- 
form NAFTA. Their goal is to kill it. 

Let me make a few quick points in summary. 

To begin with, for a law to be challenged under NAFTA, it would 
have to contain provisions dealings with trade. Non-trade issues do 
not come under the purview of NAFTA. The allegations made by 
some groups in fundraising that NAFTA would roll back environ- 
mental laws in this country is simply not true, especially since the 
majority of these laws address domestic issues and do not contain 
trade measures. 

Second, in order to challenge a conservation law there have to be 
measures in NAFTA for that purpose. The good news is that 
NAFTA was negotiated specifically to promote sustainable develop- 
ment and avoid a bad environment. 

Third, there were challenges to environmental law. Canada and 
Mexico is listing the issue of fishing with driftnets that Sierra Club 
has put forth. Are either Canada or Mexico going to challenge 
driftnet laws when neither country fishes with driftnets? 

I think the answer clearly is no. 

Four, even if all the necessary conditions occur, there would be 
an extended consultation between those parties before a dispute 
resolution panel was formed. Opportunity for public input into that 
process are unprecedented. 

Five, if a dispute ever reaches a panel, NAFTA gives several 
ways to defend our laws that are superior by a measure than those 
currently available under GATT. 

In conclusion if you are pro-poor people or pro-environment, pro- 
jobs, you have to be pro-NAFTA. 

Thank you. 



53 

[The statement of Dr. Hair may be found at end of hearing.] 

Chairman Studds. I guess that is as good a note as any to end 
it on. It all depends on which newspaper you read. I want to reit- 
erate my personal apologies because of the time constraints. 

There is going to be a series of votes on the Floor, There is no 
way we can resume. 

To each of you my great appreciation for your endurance for 
what you did this morning. Your own testimony deserves consider- 
ation. I also want to thank my long-suffering colleague from Massa- 
chusetts for sitting through this. The hearing is adjourned. 

[Whereupon, at 1:10 p.m., the Committee was adjourned; and the 
following was submitted for the record:] 



54 



TESTIMONY OF AMBASSADOR MICHAEL KANTOR 
United States Trade Representative 

before the 

House Committee on Merchant Marine and Fisheries 

November 10, 1993 



THE AOMINISTRATIOM'S CASE FOR MAFTA 



Mr. Chairman, members of the Committee, I eun pleased to appear 
before you today to set forth the Clinton Administration's case for 
the North American Free Trade Agreement (NAFTA) , with the recently 
negotiated supplemental agreements. 

This fall, members of the Administration have appeared before 
Committees in the House and the Senate. We appreciate these 
opportunities to present the Administration's case on why the 
approval of NAFTA is central to our national interests. 

The question we must ask ourselves as we consider the NAFTA is 
whether the United States will be significantly better off with the 
NAFTA and its side agreements than by rejecting them. We believe 
that the answer to that question is a clear and resounding yes. 

The case for NAFTA comes down to two compelling points: NAFTA 
will increase economic growth and jobs in the United States, and 
NAFTA will help us resolve problems that trouble Americans in our 
current relationship with Mexico. 

There is a related point that is missed too often by the 
opponents of this agreement: rejecting the NAFTA and the 
supplemental agreements will not solve the problems that trouble 
us. The NAFTA will help us solve these problems in a way that 
benefits our country and our continent. 

HAFT A and Our Trading Goals 

Against a background of intense debate, a mountain of 
misinformation, and considerable hyperbole, it is important to 
remember that what NAFTA really does is some very simple things 
which Americans have long sought in our trading relationships. The 
NAFTA levels a playing field that is now tilted against us. Over 
time it will eliminate tariffs and non-tariff barriers among the 
United States, Mexico and Canada. Mexico and Canada will give our 
products preferential treatment compared to our competitors in 
Europe and in Asia and end the failed maquiladora programs. In 
addition NAFTA and its side agreements will address long-neglected 
environmental and labor issues. 

The NAFTA creates the world's largest market: 370 million 
people and $6.5 trillion of production. That makes us stronger 
here at home, and better able to compete with Europe and Asia. 



55 



- 2 - 

At the same time, NAFTA has strong rules to stop unfair 
treatment of American products and American investors. It requires 
Mexico to change laws that have forced our companies to move 
production to Mexico in order to sell their products in Mexico. It 
requires protection from piracy of our films, our books and our 
technology. The supplemental agreements will require stronger 
enforcement of laws protecting labor and the environment, and will 
help us work together with Canada and Mexico to improve deficient 
laws. 

NAFTA and the Administration's Economic Strategy 

The NAFTA package is a vital element of the President's 
overall economic strategy. 

President Clinton and this Administration are committed to 
building the strongest, most competitive economy in the world. By 
doing so, we will expand job opportunities for United States 
workers and for their children who will be entering the work force. 

We are finally facing the fact that our economy, as well as 
the global economy, is changing. Technology has revolutionized the 
world. Our economy is no longer self-contained, and the U.S. 
economy no longer dominates the world's economy. We compete in a 
global economy, where capital and technology are mobile. These 
trends are here to stay. The question is not whether we adapt to 
them, but how. 

Our economic strategy — health care reform, reducing the 
deficit, increasing public and private investment, reinventing 
government, welfare reform, changes in education, worker training, 
investing in technology — all work in pursuit of the same 
objective: to build a more secure productive and competitive 
economy . 

Our trade policy, including NAFTA, is an essential part of 
that strategy. The companies, farmers and workers of the United 
States are world-class competitors. We lead the world in 
everything from airplanes and computers, to wheat and soybeans. We 
have regained our position as the world's leading exporter. Last 
year U.S. trade in goods and services exceeded one trillion 
dollars. 

Opening up new markets is the key to new job creation and 
economic growth. NAFTA presents an opportunity to compete and win 
in a vast new market: 90 million people in Mexico, in a fast 
growing area, hungry for U.S. goods. It is also a step to an even 
larger market — 400 million people throughout Central and South 
America and the Caribbean. 

The United States seeks to open markets everywhere. We seek 
to trade and to compete worldwide. We have nearly $200 billion 



56 



- 3 - 

each year in two-way trade with the countries of the European 
Community; through APEC, we seek expanded trade with the rapidly 
growing nations of Asia. Japan is a major market for U.S. 
products, despite the major and persistent barriers that we are 
committed to breaking down. Comfileting the Uruguay Round — taikinq 
down tariff and non-tariff barriers worldwide, and writing new 
rules for the international trading system — remains a top 
priority for us. 

But it is no accident that Canada is our number one trading 
partner, despite having a population of only 27 million, and Mexico 
has become our third leading trading partner, despite its historic 
policy of maintaining a closed economy. Shared borders and 
r^eographical proximity do matter, even in this globalized economy. 

And we have a natural advantage, and a great opportunity, to 
expand trade and investment with Mexico, and then with the rest of 
Central and Latin America and the Caribbean. Many of those 
countries have chosen, in recent years, to cast off the controls on 
their economies and the shackles on their political systems. 

Tariffs have fallen and non-tariff barriers have been reduced. 
Since 1989, U.S. exports to Latin America and the Caribbean 
increased over 50 percent and are growing at over twice the rate of 
U.S. exports to the rest of the world, making this region our 
second fastest growing market. They have become a growing market 
for U.S. products; 43% of Latin American imports come from the 
United States. 

Chile, Venezuela, Argentina and many other nations are 
intently following the NAFTA debate. The possibility of NAFTA 
accession provides an incentive for fvirther trade and investment 
liberalization in the region. The decision to reject NAFTA would 
have profound negative economic and political consequences 
throughout the hemisphere and for the prospects for the expansion 
of trade in the global trading system. 

The NAFTA is an instrument for helping the United States, 
Mexico and Canada cooperate in meeting Asian and European 
competition. It will help us produce more globally competitive 
products . 

In the new global economy, there are challenges and risks, as 
well as great opportunities. I am confident that American workers 
are up to the challenge of competing — and will reap the benefits. 
One reason I am so confident is that we are not going into NAFTA 
blindly. We do not have to speculate about the results from this 
change; we have gone through a six year trial run. 



57 



- 4 - 

Job Growth and Trade with Mexico 

Mexico, recognizing that its economic policies had been 
disastrous, has begun to lower trade and investment barriers. The 
results have been dramatic for the United States: 

• From 1987 to 1992, we transformed a $5.7 billion trade 
deficit with Mexico into a $5.4 billion trade surplus. 

• U.S. exports to Mexico increased from $12.4 billion in 
1986 to $40.6 billion in 1992, with increases coming 
across the board from computers to agriculture. 

• Mexico has become our third leading export market, 
and our second leading market for manufactured exports 
($34.5 billion) and our third largest market for 
agricultural products ($3.7 billion). 

• 84% of this growth in exports has been exports for 
Mexican consumption. 

• 400,000 U.S. jobs related to exports to Mexico were 
created. 

• 70% of all dollars spent by Mexicans on imports are 
spent on U.S. products. 

The success of the past seven years has occurred even though 
Mexican trade barriers remain far higher than ours. Bringing down 
the remaining barriers, which is what NAFTA does, ensures continued 
growth of U.S. exports to Mexico, which have been such a bright 
spot in our economic picture for the past seven years. 

Virtually every responsible study that has looked at the labor 
issue concludes that NAFTA will produce a net gain in jobs or an 
increase in real wages in the United States. The Administration 
believes that with NAFTA, an additional 200,000 jobs related to 
exports will be created in the U.S. by 1995. While the studies 
acknowledge that there will be some jobs lost in certain sectors, 
overall, job gains will significantly exceed job losses. The 
studies also agree that the jobs lost will be relatively small. 
This is true because Mexico's economy is only one-twentieth the 
size of ours, and our tariff and non-tariff barriers are already 
low. Mexico's productive assets, capacity and infrastructure are 
far below levels and standards in the United States or even Canada. 



HAFTA and Our Current Trade Problems 

Ironically, most of the concerns you hear in America about 
NAFTA are in reality problems that exist right now — problems that 
the NAFTA will address. For example, in the trade area, despite 



58 



- 5 - 

Mexico's recent liberalization and despite the enormous gains we 
have enjoyed in our bilateral trade in recent years, the playing 
field is still tilted against us. NAFTA will level the playing 
field for U.S. workers. 

For one, it will eliminate Mexican performance requirements 
and other unfair rules in the auto sector — requirements that 
imports of vehicles into Mexico must be off-set two-to-one by 
exports of Mexican-made cars. It will eliminate the requirement 
for Mexican importers to secure a government permit each time they 
want to buy U.S. potatoes. Mexico has the right under the GATT to 
raise its tariffs up to 50%. If it chooses to do so, U.S. exports 
would not be affected because of the protections we gain under 
NAFTA. 

Historically, Mexico has been a closed, state-controlled 
economy. To shield its industry and agriculture from competition, 
it relied on tariffs as high as 100% and a full range of non-tariff 
barriers, including domestic content requirements, restrictions on 
investment, performance requirements to keep out exports, and 
import licensing requirements which allowed the central government 
to dictate the levels of Mexico's agricultural imports. As a 
result, protected from competition from imports, Mexican producers 
were inefficient, and the Mexican economy was characterized by 
widespread poverty. Mexico's protectionist regime did not serve 
the interests of Mexico's people. 

Mexico remained largely closed to U.S. business until U.S. and 
Mexican law combined to produce the maquiladora program. But this 
program hardly resulted in an open Mexican market. 

The maquiladora program created trade preferences and 
incentives for companies to locate assembly plants in Mexico to 
produce for the U.S. market. It gave products assembled in Mexico 
these preferences while at the same time maintaining all of 
Mexico's trade and investment barriers. The program thus created 
an artificial "export platform" in Mexico, with products assembled 
in maquiladora plants being required to be exported to the U.S. By 
1992, there were over 2,000 maquiladora factories operating in 
Mexico, the overwhelming number of which were established by U.S. 
and Mexican corporations, employing more than 400,000 Mexican 
workers. 

In addition, Mexico's high import barriers and Mexican rules 
requiring firms selling in the Mexican market to open factories in 
Mexico have made it difficult if not impossible for many of our 
companies to sell products made in the U.S. in Mexico. Non-tariff 
barriers — licensing, citizenship requirements, and a host of 
other regulations were especially hard on small businesses in the 
U.S., which do not have the resources to navigate through the 
bureaucratic maze in Mexico. 



59 



- 6 - 

The NAFTA will transform the situation by opening Mexico's 
market and eliminating the distortions created by the maquiladora 
program. Under NAFTA, the mac[uiladora program is effectively 
eliminated, along with import protections, and existing factories 
will be permitted to sell in the Mexican market without 
restriction. 

Much of the opposition to NAFTA reflects justifiable concern 
about the policies of the past that have disadvantaged U.S. 
workers. Despite Mexican progress in voluntarily opening markets, 
Mexican tariffs remain, on the average, 2.5 times higher than ours. 
By contrast, over 50% of our imports from Mexico already enter 
duty-free. Our average tariff on imports is only 4%. 

Mexico currently has no obligation to continue recent market- 
opening moves on which thousands of U.S. jobs already depend. 
NAFTA locks in current access and expands on it. 

NAFTA will require relatively few changes on our part — while 
requiring Mexico to eliminate its protectionism and overregulation. 
NAFTA will eliminate especially burdensome tariffs and non-tariff 
barriers in a number of key sectors where the U.S. is competitive 
vis-a-vis Mexico, such as autos and agriculture. 

NAFTA lets U.S. workers compete on a level playing field with 
fair rules. And we are confident, in those circumstances, U.S. 
workers will succeed. 

NAFTA will give U.S. exporters a significant preference in the 
rapidly expanding Mexican market over Japanese, European, and other 
foreign suppliers. As I have already noted, Mexico's tariffs 
average 10 percent. Countries other than the United States (and 
Canada) will continue to face Mexican duties. In addition, 
Mexico's current import licensing requirements on agricultural 
imports will disappear for the United States (and for Canada, for 
most products) when the NAFTA goes into effect. However, a license 
may still be required to bring in covered products from all other 
countries. 

Major Feat\ires of NAFTA 

Reduction of Mexican Tariffs; Under NAFTA, half of all U.S. 
exports to Mexico become eligible for zero Mexican tariffs when 
NAFTA takes effect on January 1, 1994. Those exports which will be 
tariff -free include some of our most competitive products, such as 
semiconductors and computers, machine tools, aerospace equipment, 
telecommunications equipment, electronic equipment, and medical 
devices. Within the first five years after NAFTA' s implementation, 
two-thirds of U.S. industrial exports will enter Mexico duty-free. 
That makes U.S. products more competitive than those of our rivals. 



60 



- 7 - 

Removing Mexican non-tariff barriers . NAFTA reduces or 
eliminates numerous Mexican non-tariff barriers which today require 
U.S. companies to invest in Mexico or manufacture in Mexico in 
order to supply the Mexican market. For example, NAFTA will 
eliminate the requirements that force U.S. companies to purchase 
Mexican goods instead of U.S. -made equipment and components. 
Moreover, NAFTA abolishes the requirements that force our companies 
to export their production, usually to the United States, instead 
of selling directly into the Mexican market. Requirements that 
make U.S. companies produce in Mexico in order to sell there will 
also be phased out. 

In addition, NAFTA includes important benefits for other key 
U.S. sectors: 

Opening up Trade in Services. NAFTA will open new markets 
for the delivery of U.S. services to Mexico and Canada, where 
service companies are already large and growing. NAFTA will allow 
U.S. service firms to provide their services directly from the 
United States on a non-discriminatory basis, with any exceptions 
clearly spelled out. Furthermore, U.S. service companies will 
benefit from the right to establish, if they so choose, in Mexico 
or Canada. NAFTA opens the Mexican market to U.S. bus and trucking 
firms, financial service providers, and insurance and enhanced 
telecommunications companies, among others. 

Protecting U.S. copyrights, patents and trademarks. NAFTA 
will ensure a high level of protection under Mexican law for U.S. 
owners of patents, copyrights, trademarks, trade secrets, and 
integrated circuit designs, including strong safeguards for 
computer programs, pharmaceutical inventions and sound recordings. 
NAFTA obligates both Mexico and Canada to enforce intellectual 
property rights against infringement, both internally and at the 
border. By enhancing protection of U.S. owners of technology, and 
of book, film and recording rights, NAFTA will increase trade and 
diminish losses from counterfeiting and piracy. 

U.S. motion pictures, music and sound recordings, software, 
book publishing and other creative industries lead the world, and 
are crucial to the high-wage economy that we intend to build. The 
copyright industries are one of the largest and fastest growing 
segments of the U.S. economy, employing 5% of the U.S. work force, 
with exports, valued conservatively, of about $34 billion in 1990. 

The Benefit to Small Business. I have noted the statements of 
several sectors citing the benefits which will result from NAFTA; 
that sentiment is widely held in the business community, by 
businesses large and small. Indeed, small businesses stand to be 
among the major beneficiaries of NAFTA. Small businesses are 
often less able to invest the time and resources to wrestle with 
the tariff and licensing requirements which presently block the way 
to the Mexican market. With tariffs reduced or eliminated, and 



61 



- 8 - 

non-tariff barriers coming down, U.S. small business, which makes 
up a growing share of U.S. exports, will be able to sell their 
American-made products into the Mexican market. 

NAFTA and the Environment 

Mr. Chairman, I welcome the opportunity to discuss the effect 
of NAFTA on the environment, and in particular, to discuss the 
environmental side agreements. 

The combination of the provisions of the NAFTA and the NAFTA 
side agreements on the environment constitute truly path-breaking 
advances in the area of trade and the environment. Just five years 
ago, when the Congress approved the U.S. -Canada Free Trade 
Agreement, few if any environmentalists had even considered trade 
issues relevant — or vice versa. In the NAFTA and the side 
agreements of the NAFTA, you now see not only heightened 
sensitivity to the need to safeguard our rights to protect our own 
environment, health and safety, but provisions aimed at seeing that 
the benefits of increased trade and economic growth are accompanied 
by provisions aimed at improving standards and enforcement of laws 
affording these protections. 

There are good reasons that the environmental efforts we have 
made have drawn the strong endorsement of six preeminent private 
environmental groups. The NAFTA and the side agreements achieve a 
number of historic firsts, including: 

o creation of the first ever North American Commission on 
Environmental Cooperation, with a mandate to promote 
cooperation to improve environmental protection on our 
continent; 

o the most explicit international affirmation ever of our 
right to keep out imported products that fail to meet the 
standards we set for protection of our health, safety and 
environment, even if these standards differ from 
international norms; 

o protection of the rights of our state and local 
governments to set and enforce higher standards than 
federal (or international) norms; 

o provisions favoring upward harmonization of standards in 
North America, without derogating from our democratic 
right to choose our own standards; 

o provisions against relaxation of environmental health or 
safety standards in order to attract or retain an 
investment, and provisions to encourage effective 
enforcement of national laws, backed by sanctions for a 
persistent failure to effectively enforce those laws; 



62 



- 9 - 

o explicit recognition of the precedence over the NAFTA of 
certain core environmental agreements containing trade 
provisions; 

o a strengthened commitment to cleaning up the border 
environment. 

These provisions and others will help us improve environmental 
conditions in North America. No one can fail to be disturbed by 
the vivid pictures we have all seen of existing environmental 
problems along the U.S. -Mexico border. These problems partly stem 
from past failures to adequately check industrial pollution, but 
also from the lack of adequate infrastructure (water treatment, 
sewage treatment, and so forth) for the growing human population. 
The maquiladora program aggravated these problems by encouraging 
rapid development at the border. 

Critics of the NAFTA try to point to these existing conditions 
as a reason to reject the NAFTA, implying that NAFTA, a treaty not 
yet in force, should somehow be blamed for all bad existing 
conditions at the border, and arguing that the NAFTA will increase 
these problems. And despite the explicit language of the NAFTA and 
the side agreements, the most extreme critics irresponsibly try to 
frighten people that NAFTA will cause us to weaken environmental 
protection and lower our standards. 

We should not accept continuation of the bad conditions at the 
border, any more than we should accept unsafe products. But NAFTA 
is not the problem with regard to these concerns; NAFTA and the 
side agreements are part of the solution. NAFTA will eliminate 
special incentives to export products in Mexico to the United 
States, thereby reducing the incentive to locate industries at the 
crowded border. And NAFTA and the side agreements will help 
promote sustainable development with improved environmental 
protection and enforcement. 

As Kathryn Fuller, of the World Wildlife Fund stated on 
September 15: "Our support of the NAFTA and the Agreement on 
Environmental Cooperation boils down to this: ultimately, the 
environment of North America will be better with the passage of 
NAFTA than without it." 

NAFTA and the side agreements contain both provisions to 
ensure that trade liberalization does not come at the expense of 
environmental protection and provisions to help improve 
environmental protection. 

Standards-Related Measures and Sanitary and Phvtosanitarv 
Measures 

The NAFTA texts on Standards-Related Measures and Sanitary and 
Phytosanitary Measures preserve our ability to maintain. 



63 



- 10 - 

strengthen, and enforce existing U.S. health, safety, and 
environmental standards, and establish ways for all three trading 
partners to strengthen their standards. Specifically, the NAFTA 's 
provisions: 

o Affirm the right of each party to choose the level of 
protection of human, animal, or plant life or health it 
considers appropriate; 

o Do not impair existing U.S. federal and state health, safety, 
and environmental standards, and preserve our right to ban 
non-conforming imports; 

o Continue to allow each country, including its state and local 
governments, to enact standards that are stricter than 
international or national standards; 

o Commit the NAFTA parties to work jointly to enhance their 
standards ; 

o Continue to allow parties to act to protect human, animal or 
plant life or health based on available information when there 
is insufficient information to conduct a risk assessment; 

o Ensure advance notice to the public of proposed regulatory 
actions in each of the three countries, to review and comment 
upon those actions, and to have such comments taken into 
account prior to final decision; 

o Establish a Committee on Standards-Related Measures to 
facilitate compatibility of standards, consult regularly on 
matters of common concern in this area, and enhance 
cooperation on developing, applying, and enforcing standards- 
related measures; and 

o Establish a Committee on Sanitary and Phytosanitary (S&P) 
Measures to enhance food safety and improve sanitary 
conditions, promote compatibility of S&P measures, and 
facilitate technical cooperation and consultation on specific 
S&P bilateral or trilateral issues. 

While granting the federal government and the states broad 
discretion to set their own environmental, health and safety 
standards, NAFTA does require governments to meet certain 
elementary requirements when applying laws and regulations to 
achieve the government's chosen levels of protection, in order to 
safeguard against blatant trade protectionism in the guise of a 
health regulation. 

The NAFTA requires that sanitary or phytosanitary (S&P) 
measures — those measures related to agricultural pests and 
disease and contamination in food — have a scientific basis and be 



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based on a risk assessment appropriate to the circumstances. The 
term "scientific" is not separately defined in the text. 
Accordingly, under general principles of international law, the 
term scientific is to be interpreted in good faith, using its 
ordinary meaning in context and in the light of the object and 
purpose of the NAFTA. Consequently, the ordinary dictionary 
meaning would apply. 

It is clear that under the NAFTA, the requirements that 
measures be based on "scientific principles" and not be maintained 
"where there is no longer a scientific basis" do not involve a 
situation where a dispute settlement panel may substitute its 
scientific judgment for that of the government maintaining the S&P 
measure. The question under the NAFTA in this regard is whether 
the government maintaining the S&P measure has "a scientific basis" 
for the measure. "Scientific basis" is defined as "a reason based 
on data or information derived using scientific methods." 

The question is also not whether the measure was based on the 
"best" science or the "preponderance" of science or whether there 
was conflicting science. The question is only whether the 
government maintaining the measvire has a scientific basis for it. 
This is because the NAFTA S&P text is based on a recognition that 
there is seldom, if ever, scientific certainty and consequently any 
scientific determination may require a judgment among differing 
scientific opinions. The NAFTA preserves the ability of 
governments to continue to medce those judgments. 

In addition, the NAFTA requires each party to ensure that any 
S&P measure that it adopts is applied only to the extent necessary 
to achieve its appropriate level of protection, taUcing into account 
technical and economic feasibility. NAFTA' s opponents have argued 
that the use of the term "necessary" in the text actually means 
"least trade restrictive." This is not true. The NAFTA' s 
negotiators specifically discussed whether there should be a "least 
trade restrictive" test in the NAFTA, and all three countries 
agreed that this obligation would not be included. Rather, this 
obligation addresses how a health law or regulation that is in 
place is applied . It does not address the validity of the 
underlying health law or regulation itself, or the level of 
protection afforded by those laws. As is the case with 
"scientific," the term "necessary" is to be given its ordinary 
meaning in light of the context. 

NAFTA opponents have erroneously charged that the NAFTA 's 
obligation that the United States, Canada and Mexico ensure that 
state and provincial governments give effect to and observe the 
NAFTA' s provisions (Article 105) somehow interferes with our 
states' ability to maintain measures to protect public health or 
the environment. Article 105, and any measures taken thereunder to 
secure observance by state and local governments of provisions of 
the NAFTA, will in no way diminish or impair the constitutional and 



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legal rights of state and local governments to adopt, maintain, or 
apply measures to protect public health and the environment. 

The implementation of Article 105 for the United States, and 
the precise legal relationship between the NAFTA and a country's 
domestic law, is a matter for each participating government to 
decide. In the United States, this issue is addressed in the NAFTA 
implementing bill. After working with the Congress, state 
officials and environmental organizations, we have proposed NAFTA 
implementing legislation that provides that there is no private 
right of action under that implementing legislation, so that no 
individual or other non-governmental entity such as corporations or 
firms will have the ability to invoke the provisions of the NAFTA 
to challenge state or local law in either federal or state courts. 

In passing, let me note that Article 105 does not apply to the 
NAFTA' s provisions on standards-related measures. The core 
requirement in the NAFTA with respect to standards-related measures 
is that they are applied in a non-discriminatory fashion. 

Another red herring has been the allegation that under the 
NAFTA the United States would have to permit the entry of Mexican 
or Canadian trucks which do not meet our safety standards. This is 
totally false. We can and will continue to enforce our safety 
standards as vigorously as possible. In addition, our rules 
related to long combination vehicles will continue unchanged. 

In brief, far from weakening environmental, health and safety 
standards, the NAFTA and the supplemental agreements set in motion 
the process for our three countries to improve and enhance 
protection of health, safety and the environment. 

International Environmental Agreements 

The NAFTA gives clear priority to the trade " provisions of 
certain international environmental agreements. During negotiation 
of the NAFTA, Congress and the environmental community wanted to 
ensure there was no ambiguity about the relationship between the 
NAFTA' s provisions and the trade provisions of key international 
environmental agreements. In particular, they wanted an explicit 
assurance that the important trade obligations of the Montreal 
Protocol on Substances that Deplete the Ozone Layer, the Convention 
on International Trade in Endangered Species of Wild Fauna and 
Flora (CITES) , and the Basel Convention on the Control of 
Transboundary Movements of Hazardous Wastes and Their Disposal (or 
related U.S. bilateral agreements with Canada and Mexico) could be 
fully implemented without any NAFTA conflict. These agreements are 
specifically listed in the NAFTA as agreements whose trade 
obligations take precedence over any inconsistent obligations under 
the NAFTA. In addition, the NAFTA provides that the list of 
international environmental agreements whose trade obligations are 
to be given precedence can be expanded. We will include our two 



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bilateral migratory bird treaties once the NAFTA takes effect. We 
intend to pursue further discussions with Mexico and Canada 
concerning the addition of other international environmental 
agreements . 

NAFTA Dispute Settlement 

NAFTA' s dispute settlement chapter contains several provisions 
responsive to concerns expressed by environmentalists. First, 
NAFTA makes explicit that the party challenging an environmental 
measure has the burden of proving that it is inconsistent with the 
agreement . 

Second, the dispute settlement panel, on its own initiative or 
at the request of a disputing party, may request a written report 
from an independent Scientific Review Board on any issues of fact 
concerning the environment, health, and safety. The dispute 
settlement panel will take the Review Board's report into account 
before reaching its final decision and will release the report to 
the public together with any final panel decision that is publicly 
released. 

Third, if a party to a dispute claims that its action related 
to its obligations under one of the international environmental or 
conservation agreements, or under NAFTA' s provisions on Standards 
or Sanitary and Phytosanitary measures, it has the option of having 
the dispute considered exclusively under the NAFTA (rather than the 
GATT) with access to a NAFTA Scientific Review Board. 
Environmental groups requested inclusion of this provision because 
they preferred NAFTA dispute settlement provisions to those of the 
GATT. 

NAFTA' s opponents have complained that its dispute settlement 
process is closed and secretive. In fact, any disputes that may 
arise under the NAFTA will be between governments — and our first 
interest will be in getting such diplomatic differences resolved. 
However, the United States recognizes that the outcome of these 
disputes may be of great interest to those in the United States 
outside the government. Accordingly, the Office of the United 
States Trade Representative will provide, as it has in all recent 
trade disputes, for public notice imd opportunity for input into 
dispute settlement proceedings involving the United States under 
the NAFTA. 

USTR currently provides public notice of the initiation of 
disputes through publication in the Federal Register. It also 
briefs interested individuals and groups on the dispute proceeding 
and accepts input from the public into the facts and arguments 
involved in a dispute settlement proceeding. For example, USTR has 
met with interested members of the environmental community, 
industry and congressional staff on numerous occasions to brief 



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them on a particular dispute, including the status of the 
proceeding and the issues involved. 

USTR also makes available to the public U.S. submissions to 
dispute settlement panels and the final reports of the dispute 
settlement panels. 

Finally, it should be emphasized that the NAFTA dispute 
settlement results will not supersede U.S. laws unless and until we 
act domestically to implement the results. That will require a 
very public process in the United States. 

Investment Provisions 

The NAFTA Investment Chapter permits each party to impose 
stringent environmental requirements to ensure that investment 
activity in its territory is undertaken in an environmentally 
sensitive manner, so long as the requirements do not discriminate 
between domestic and foreign investors. This includes, for 
example, the requirement in some states for environmental impact 
assessments of new private construction as well as government 
projects. 

Further, the parties renounce the relaxation of health, safety 
or environmental measures for the purpose of attracting or 
encouraging investment. The text sets forth a procedure for 
compulsory consultations between parties in case such a relaxation 
occurs, with the purpose of ending the practice. 

The Supplemental Agreements on Labor and the Environment 

President Clinton endorsed NAFTA last October during the 
campaign in a speech at North Carolina State University, but he 
also set out a series of principles which he wanted to see 
incorporated into supplemental agreements and related initiatives. 

After months of negotiations. President Clinton, Prime 
Minister Campbell, and President Salinas signed historic agreements 
on environmental and labor cooperation on September 14. 

He made a promise to the American people which he has kept: 
that he would make sure economic growth with Mexico did not come at 
the expense of the environment or workers' rights, and that we 
would be protected from the possibility of import surges. 

These Agreements are ground-breaking. The fundamental 
objectives of the labor and environment agreements are to work 
cooperatively to improve conditions for labor and the environment 
throughout North America and to improve national enforcement of 
national laws relating to labor and the environment. They commit 
all three nations to fair, open and equitable administrative and 



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judicial processes for the enforcement of environmental and labor 
laws. 

The Supplemental Agreement oh Environmental Cooperation is the 
first environmental agreement negotiated specifically to accompany 
and build on a trade agreement. This agreement will help ensure 
that the economic development that will occur as a result of NAFTA 
takes place in a way that protects and improves the environment. 

The Agreement contains important obligations regarding 
citizens' access to justice. These include commitments to openness 
and transparency in both the development of laws and regulations 
and the legal processes for resolving disputes, and commitments to 
provide appropriate public access to administrative and judicial 
processes for the redress of harms and for environmental law 
enforcement. 

While recognizing their rights to set whatever levels of 
protection they deem appropriate, the three countries pledge to 
ensure that their laws and standards continue to provide high 
levels of environmental protection and to work cooperatively in 
enhancing protections. They commit to effective enforcement of 
those laws, a commitment backed up by a dispute settlement process. 
Countries are obligated to report on the state of their 
environments, and to promote environmental education, scientific 
research, and technological development. 

The Agreement creates a new Commission on Environmental 
Cooperation. The three countries' top environmental officials (the 
EPA Administrator for the United States) will comprise the 
Commission's Council. 

A Joint Advisory Committee made up of nongovernmental 
organizations from all three countries will advise the Council in 
its deliberations. 

The heart of the Commission is its Secretariat, housed in a 
single location and operating under the direction of an Executive 
Director, who will take broad direction from the Council but 
maintain a high degree of independence. 

A major goal of the Commission is to broaden cooperative 
activities among the NAFTA partners. The Commission will have an 
aggressive and important workplan. 

It will promote greater public access to information about 
hazardous substances (what we call "community right-to-know") . It 
will consider ways to promote the assessment and mitigation of 
transboundary environmental problems. The Commission will serve as 
a point of inquiry for public concerns about the NAFTA' s effect on 
the environment, and be an avenue for NAFTA dispute settlement 



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panels to obtain environmental expertise when faced with 
environmental issues. 

It will consider the environmental implications of processes 
and production methods (PPMs) , or, as the agreement states, 
"environmental implications of products throughout their 
lifecycles.," 

Transparency is the hallmark of the NAFTA supplemental 
agreement on environmental cooperation, and citizens of all three 
countries will be free to make submissions to the commission on 
their concerns related to the full range of environmental issues. 
The Commission's secretariat will act on submissions appropriately 
to develop fact-finding reports. The reports will be made public 
if two of three Parties concur ( i.e. . the party that is the subject 
of the report cannot bar publication) . 

The Agreement creates a consultative process for the Council 
to discuss issues, including those brought to light through the 
public submission process and the Secretariat's fact-finding 
activities. Special attention is given to matters involving non- 
enforcement of a nation's environmental law when consultations fail 
to resolve the matter. 

In the event that one Party considers that another Party has 
persistently failed to effectively enforce its environmental laws 
(affecting a sector involving traded goods or services) , the matter 
may be referred to a dispute settlement panel. The dispute 
settlement process provides, in the end, for sanctions if countries 
have failed to correct problems of nonenf orcement . 

The Agreement has a broad, inclusive scope. Any environmental 
or natural resource issue may be addressed through the work 
program, and any environmental concern or obligation of the 
agreement may be the subject of consultations between parties, from 
migratory and endangered species to transboundary pollution, to 
advising the NAFTA Commission on disputes on health restrictions. 
Understandably, the realm of issues subject to dispute settlement 
panels and possible sanctions is more circumscribed, focused on 
whether the Parties are effectively enforcing their environmental 
laws, and whether that nonenf orcement is related to trade or 
competition among the Parties. 

In short, the Agreement on Environmental Cooperation will 
ensure that economic growth is consistent with goals of sustainable 
development. 

Processes and Production Methods 

Let me be more specific about our plans for the Commission on 
Environmental Cooperation in this area. 



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From our perspective, consideration of the issue of "processes 
and production methods" or PPMs is a high priority element of the 
workplan. This involves the very complex, and often sensitive, 
questions of how to address any environmental effects of products 
due to the processes or production methods associated with them. 
Questions like: how was the product harvested?, how was it 
processed?, what effects will its consumption have on say, the 
environment? 

These questions are of a global nature, not limited just to 
the context of North America. The Administration is committed to 
taking them up with our North American neighbors in the context of 
NAFTA and the supplemental agreement on environmental cooperation 
as a matter of priority. We are also seeking a broader 
multilateral dialogue. Indeed, preparatory discussions are already 
underway in the OECD to develop a sound analysis of PPMs. We are 
actively involved in those discussions. 

Another important step from our perspective will be to engage 
the GATT, beginning with a post-Uruguay Round workprogram on the 
environment, which we hope will be launched at the conclusion of 
the Uruguay Round. This work would of necessity have to include a 
thorough examination of the adequacy of the GATT's substantive 
rules as they relate to PPMs. Broadly, our objective is to ensure 
that countries are able to effectively address environment 
objectives while not providing a means for arbitrary limits on 
trade. Easier said than done. 

This work will take time — but we will take it on in good 
faith, multilaterally and in the North American context. 

Environmental Funding 

During the campaign, the President noted the pressing need to 
address environmental problems along our southern border. The 
Administration is actively engaged in the issue, from the National 
Park Service and the Fish and Wildlife Service to USDA's Rural 
Development Agency and public health and housing agencies. The 
Environmental Protection Agency is coordinating the effort to build 
on and improve activities under our bilateral border plan. 

However, a key to improved environmental conditions along the 
border is for both countries to marshall the resources to address 
the problem. As Secretary Bentsen announced on October 27, Mexico 
and the United States have agreed to the creation of a new Border 
Environment Cooperation Commission (BECC) to help border 
communities develop environmental projects, accompanied by a North 
American Development Bank (NADBank) as a new financing mechanism 
capable of tapping international capital markets to support border 
environmental infrastructure projects. The goal of the BECC will 
be to develop specific projects to meet the pressing needs for 



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wastewater treatment, drinking water, disposal of municipal solid 
wastes and other environmental infrastructure needs. Local input 
to the decision-medcing process was a prime objective in creating 
the new institutions. A majority of the Board of Directors of the 
BECC will come from states and localities in the border area; they 
will consult on all project issues with an Advisory Council that 
will also draw its members primarily from the border communities. 
The BECC will certify projects for eligibility for loans and loan 
guarantees from the NADBank. The NADBank, supported equally by the 
United States and Mexico, will use a modest base of paid-in capital 
($225 million over four years from each country) to raise some $2 
billion or more from the capital markets. In addition, by setting 
aside 10 percent of the NADBank for community adjustment and 
investment, we are assuring communities across America that 
measures are in place to assist them, should they need them. USTR, 
EPA, State, and the Department of the Treasury consulted with 
Congress, the states and the public throughout the negotiations. 

If we reject NAFTA, we lose the opportunity to put these 
unique cooperative institutions to work to tackle the significant 
environmental problems between our countries and in the border 
region. 

NAFTA Report on Environmental Issues 

I would like to draw this Committee's particular attention to 
one element of the NAFTA package that the President transmitted to 
Congress last week: the NAFTA Report on Environmental Issues . 
Because of the high priority the Clinton Administration places on 
protecting the environment, and on ensuring that Congress and the 
public are fully informed, my office, working with an interagency 
team, put together a report on the likely significance of the NAFTA 
and its associated side agreements for environmental issues. I 
believe you will find this report to be a useful tool in your 
consideration of the NAFTA and its implementing legislation. 

The main conclusion of this government-wide study is that the 
NAFTA and its side agreements, with their unprecedented attention 
to environmental issues, improve the prospects for resolving 
environmental problems in North America. Our continent has serious 
environmental problems, particularly along the U.S. -Mexican border. 
However, these problems are the result of the existing economic 
relationship between the United States and Mexico; they are not the 
result of NAFTA, which has yet to come into effect. The 
fundamental issue is whether passage of the NAFTA will exacerbate 
these environmental problems or provide effective mechanisms to 
ameliorate them. 

The Report finds that while implementation of the NAFTA may 
have some minor short-term adverse environmental impacts (e.g., by 
leading to additional trade-related traffic in the border region) , 



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the NAFTA will have important beneficial effects on the environment 
which should outweigh these adverse impacts: 

NAFTA will remove the current artificial incentives which have 
intensified investment along the U.S. -Mexico border through 
the maquiladora program. By dispersing new industrial 
development more evenly throughout Mexico, NAFTA should reduce 
pressures on the already-stressed border environment. 

Through mechanisms contained in its associated Border 
Environment Cooperation Agreement, NAFTA will expand the 
public and private resources available for building the 
infrastructure so desperately needed to address pollution 
problems in the U.S. -Mexico border area (e.g., water treatment 
plants and waste disposal sites) . 

Many environmental issues are transboundary in nature (e.g., 
protection of endangered species whose habitat extends across 
national boundaries) . The provisions of NAFTA' s supplemental 
Environmental Agreement, by establishing new institutions to 
promote environmental cooperation eunong the three NAFTA 
countries, will help identify and implement effective 
international solutions to transboundary environmental 
problems. 

With or without NAFTA, population growth and economic 
development are expected to continue in the U.S. -Mexico border 
region, and that growth will have environmental effects. In the 
absence of NAFTA, industrial investment in the border region is 
likely to grow at a far more rapid pace (as a result of incentives 
under Mexico's maquiladora program), with attendant adverse 
consequences for the environment. Economic growth, spurred by 
NAFTA, will make more resources available for the pursuit of 
environmental projects in Mexico. The Report also notes that 
available evidence and empirical research suggest that 
environmental considerations are generally not important 
determinants of investment decisions in North America. 

However, without the mechanisms that NAFTA (and its associated 
agreements) would establish to promote cooperation and generate 
funding, it will be much more difficult for the United States, 
Canada and Mexico to effectively address the environmental 
consec[uences of development. As a result, in the absence of NAFTA, 
the North American environment — and particularly the environment 
in the U.S. -Mexico border region — is likely to deteriorate 
further. 

The Administration believes that this Report will serve a 
valuable purpose in Congress's consideration of the NAFTA. Our 
experience with the NAFTA, in which the agreement benefitted 
greatly from public input from the environmental community, has 



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demonstrated to us the Importance of tedcing environmental 
considerations into account in the negotiation of major trade 
agreements. We look forward to working with Congress on how best 
to continue that practice. 

Rejecting NAFTA will do nothing to solve environmental 
problems. In truth, we would lose a remarkable opportunity, first, 
to set a precedent for future trade agreements, and secondly, to 
find solutions with our two neighbors. This is why six major 
environmental groups, representing millions of environmentalists in 
this country, announced their support in September for passage of 
the NAFTA. 

John Adams, Chief Executive of the Natural Resources Defense 
Council, in endorsing the NAFTA on September 15 said: "...As the 
NAFTA process has unfolded, the North American environmental 
community has established an enduring and effective voice on the 
trade policy choices affecting citizens throughout the continent". 
True indeed, but too modest. The concerns expressed by the 
environmental community are global in reach. The NAFTA begins here 
in North America the process of ensuring those concerns are 
addressed throughout the world. 

Foreign Policy Implications 

The NAFTA deserves to be approved on its economic merits. 
However, the foreign policy implications of this issue should also 
not be minimized. Echoing comments made by Secretary of State 
Warren Christopher recently: "Rejection of NAFTA would seriously 
damage our relations with Mexico and erode our credibility with the 
other nations of the hemisphere and around the world. For the 
United States, failure to approve NAFTA would be a self-inflicted 
setback of historic proportions." 

In my view a Congressional rejection of NAFTA would be a "shot 
heard around the world". It would be read across the globe as a 
seachange, marking a U.S. retreat from our traditionally strong 
advocacy for open markets and expanded trade. It would undermine 
our position as a negotiating partner on global trade agreements, 
like the Uruguay Round, which are vital to the economic renewal of 
the United States. 

NAFTA is good economic policy and good foreign policy. 

Conclusion 

All Americans agree that we cannot respond to the challenge of 
a changing world by drifting, content to accept the result of other 
nations' trade and economic strategies. We need our own strategy, 
which builds on our strengths, faces our weaknesses, and responds 
to the challenges and realities around us. 



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We would ask the opponents of NAFTA: does walking away from 
the NAFTA seem like good trade and economic strategy? Can you 
envision Japan or the EEC — if they were in our position — 
rejecting a deal like this? Would either of them kick sand in the 
face of their third biggest, and fastest growing, trading partner? 
Would they opt for the status quo, the unbalanced relationship, 
where Mexico keeps the tariff and non-tariff barriers it chooses to 
keep? 

Would they ever be willing, in one unthinking lurch, to throw 
away the friendship and progress that have characterized the past 
seven years, dreunatically reversing the historic pattern of 
mistrust and antagonism? Would they conceivably believe that it 
would be easier, somehow, to cooperate with Mexico on the 
environment, controlling drug traffic, or illegal immigration, if 
NAFTA were defeated? 

This Administration did not negotiate the NAFTA. Moreover, 
Bill Clinton as a presidential candidate was sharply critical of 
the economic and trade policy of his predecessors. When confronted 
with the need to make a decision on NAFTA, he approached it very 
skeptically. There were powerful political reasons for opposing 
it. 

But when he studied it, he found that NAFTA — particularly if 
strengthened by supplemental agreements — would be strongly in the 
economic interest of the United States. It was not a favor that we 
were doing for Mexico. It would benefit both countries, and Canada 
as well. It would not solve all our nation's economic problems, 
but it would be an important piece of the economic strategy that we 
were putting in place to build the world's most productive and 
competitive economy. 

The Administration has the responsibility of convincing 
Congress and the country that NAFTA is in the national economic 
interest, and we intend to do so. I am confident that by the time 
Congress votes on NAFTA later this year, the country will recognize 
that NAFTA is a vital part of the solution to the economic 
challenges that face us. 



75 



STATEMENT OF BRUCE BABBITT, SECRETARY OF THE INTERIOR, BEFORE THE 
MERCHANT MARINE AND FISHERIES COMMITTEE, UNITED STATES CONGRESS, 
ON THE NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA), NOVEMBER 10, 
1993 



Mr. Chairman and Members of the Committee, I appreciate the opportunity to discuss 
with you the North American Free Trade Agreement. As you know I strongly believe 
NAFTA is good for jobs, it is good for the environment, and it is good for the people of 
the United States. 

I cannot emphasize enough my sense that for both economic and environmental reasons 
NAFTA is a singular opportunity. In fact, in our relations with Mexico, NAFTA may be 
the opportunity of our lifetimes. I would like to emphasize this opportunity by making 
four points: 

One, NAFTA is Green 

Two, NAFTA means cooperation 

Three, NAFTA is an important precedent, and 

Four, the indirect impacts on border refuges and wildlife trade from NAFTA are 

manageable. 

There are powerful forces in the world today that affect our jobs and our environment 
here in the United States, including: the rapid globalization of our economy; the strains 
that economic development already puts on our ecosystems and life-supporting 
resources, such as water and land; the vastly increased economic competition from our 
trading partners; the incredible rapidity of technological advances; and the presence of 
global environmental threats, such as ozone loss and climate change. 

It is of utmost importance to keep in mind that these changes will continue to occur • 
whether NAFTA is approved or not. With NAFTA, we will have some control over both 
the economic and environmental impact of these global changes. Without NAFTA, these 
same forces of change will continue to exist, but we will have less control. NAFTA, 
because it is coming to a vote, for the first time allows people a chance to protest these 
changes. To protest is a natural human reaction. Unfortunately, in this case, it is a very 
misguided reaction. NAFTA, as it increases our cooperation and dialogue with Mexico 
and Canada, is a step towards a solution. 

There is a lot of misinformation being churned out about NAFTA's impact on the 
environment. Let me give you just one example: 

A few weeks ago, an anti-NAFTA group took out a full-page ad in the Washington Post 
and New York Times, featuring a large photo of a clearcut forest. The ad claimed that 
NAFTA promotes unrestricted trade in natural resources, and said that many existing 



76 

laws, such as the current U.S. ban on exporting certain unprocessed logs, would be 
considered illegal barriers to trade. This is simply untrue. The NAFTA explicitly exempts 
U.S. controls on the export of loos from NAFTA's rules qovernino National Treatment 
and Import and Export Restrictions. 

I would like to take time to address NAFTA's effect on those laws and resources under 
my stewardship. I truly appreciate this opportunity to respond to some of the nonsense 
I have been hearing about what effect NAFTA will have on the environment. 

The first point I would like to make is that NAFTA is green . Its ground-breaking 
provisions, together with the Environmental side agrrement negotiated by the 
Adminstration promote sustainable development and strengthen the advancement and 
enforcement of environmental laws in all three signatory countries. The agreement 
discourages countries from relaxing environmental standards or enforcement to attract 
or retain investment, and for the first time in trade history it establishes dispute 
settlement mechanisms that ensure that scientific and environmental viewpoints are 
heard and taken into account. 

NAFTA, through article 104, gives precedence to the trade provisions of the Convention 
on International Trade in Endangered Species (CITES), as well as the provisions of the 
Montreal Protocol for the protection of the Ozone Layer, and the Basel Convention on 
Transboundary Movement of Hazardous Waste. This article is open to the addition of 
other agreements. As many of you are aware, we have already gotten verbal agreement 
from Canada and Mexico to add the Migratory Bird Treaties to this section of the 
NAFTA. 

The second point I want to make here todav is that NAFTA means cooperation. Some 
of you may not be aware that the Department of the Interior has a long-standing 
cooperative relationship with Mexico on wildlife enforcement and protection. The U.S.- 
Mexico Migratory Bird Treaty of 1936, the Joint Committee on Wildlife and Plant 
Conservation of 1974, the tripartite agreement on the Conservation of Wetlands of 1988, 
and the US/Mexico/Canada CITES North American region training activities are excellent 
examples. The engagement with Mexico due to the development and negotiation of the 
NAFTA package has been a boon to these activities and U.S.- Mexico relations in 
general. I am convinced that the foundation provided by NAFTA and the Environmental 
Side Agreement will be essential to continue this forward progress. 

In addition, we have dozens of extremely important bilateral programs that help us 
protect our side of the border by helping the Mexicans to manage their side of the 
border. We have, for example, the Recovery Plan for the Sonoran Pronghorn Antelope, 
the Sonoran Desert Tortoise and Gould Turkey assessment projects. We have the 
Regional Conference of US/Mexico border States on Parks and Wildlife, the Chihuahua- 
Big Bend Ecological Studies, the Big Bend/Sierra Del Carmen Sister Parks Resource 
management and inventory program, the Coronado Trail Study, the Lower Rio Grande 



77 



Community Heritage Project, the Sierra Maderan Vegetation Studies, an internship 
program to bring Mexican students to National Park sites and offices, the San Pedro 
River Watershed Project, the BLM coordination of binational plans for the Pinacate 
Biosphere Reserve, and 15 years of cooperation in the FWS sea turtle conservation 
program. 

Recent initiatives have been even more exciting. As a follow-up to Mexico's 1991 
accession to CITES, we have trained over 100 Mexican officials in wildlife enforcement. 
This spring, I participated (a first for a Secretary of the Interior) in the U.S.-Mexico 
Binational Commission, where both countries made very important commitments to 
increase coordination on border parks and refuges, increase Mexican participation on 
the North American Wetlands Conservation Act and to closely coordinate work on 
CITES. And, in June I went to President Salinas' dedication of the Pinacate Bio- 
Reserve, where we discussed the possibility of cross-border planning of an International 
Joint Bio-Sphere Reserve, which would incorporate Departmental lands north of the 
border. These, initiatives and similar cooperative programs between other U.S. Agencies 
and their counterparts in Mexico are in a very large part due to the climate fostered by 
NAFTA, and such cooperation can be expected to increase if NAFTA is approved. 

Ladies and gentleman, the United States shares nearly 2,000 miles of border with 
Mexico. The vast majority of this land is managed by the Federal Government. The 
National Park Service manages 1.5 million acres along the border, accounting for 28 
percent of the borderlands between the United States and Mexico. The Fish and Wildlife 
Service manages eight national wildlife refuges, totalling over 1.2 million acres, along the 
border. FWS also has responsibility to maintain and seek recovery of at least 460 
endangered, threatened, proposed, and candidate species of plants and animals within 
25 miles of the border. 

As the person responsible for the National Park Sen/ice and the Fish and Wildlife 
Service, I know I cannot protect these areas by myself. I am asking you here today to 
recognize that a significant part of the environment of the United States is absolutely and 
inextricably linked to the environment of Mexico (a fact that is true well beyond the 
immediate border area itself). NAFTA recognizes this fact and will provide a basis for 
positive economic and environmental cooperation between our countries. The 
Environmental Side Agreement will help institutionalize, nurture, and leverage the 
cooperative relationship we have already begun to build. 

The Environmental Side Agreement has several extremely important features for my 
Department. The Commission for Environmental Cooperation, created by the agreement, 
has an explicit mandate to consider and develop recommendations on the " conservation 
and protection of wild flora and fauna and their habitat and specially protected natural 
areas, and the protection of endangered and threatened species ." In addition, the 
agreement's provision to examine the environmental implications of any particular 
product throughout its life cycle provides a mandate to discuss process and production 



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methods -- including environmental impacts of resource extraction, management, and 
harvesting - and to develop solutions. This will provide an excellent institutional basis 
for what I am sure will be a very fruitful multi-year effort 

I am also particularly excited about the Side Agreement mandate to address the state 
of the North American environment. I believe this will provide a unique opportunity to 
highlight environmental and natural resource issues that are hemispheric or binational 
in nature. In my view, a vote against NAFTA and the Environmental Side Agreement is 
a vote against the U.S. environment. 

The third point I want to get across today is that NAFTA is an important precedent , a 
milestone in efforts to reconcile the relationship between trade and environment. If we 
reject NAFTA we literally will have to start over at the beginning. It is no secret that 
most of our trading partners are watching the environmental aspects of the NAFTA very 
closely. In fact, it is causing some of them considerable discomfort. 

In this country, the GATT tuna/dolphin case was the alann that helped focus many 
environmentalists on potential conflicts between international trading rules and a small 
but important number of U.S. laws that use trade to protect the environment. Since that 
time, the most far-sighted of the environmentalists have worked hard to green the 
NAFTA. And having largely achieved their goal, these environmentalist are among the 
most active supporters of the NAFTA package today. 

I'll be the first to admit that NAFTA does not fix every single potential conflict between 
trade rules and environmental laws. It also doesn't cure warts or guarantee the 
Redskins a winning season. The vehicle must be appropriate to the problem. NAFTA's 
green provisions, combined with the environmental side agreement, make it the greenest 
trade agreement ever negotiated. The NAFTA package is the single most serious effort 
by any government up to this date to recognize and confront and begin to manage the 
interactions of trade rules and the environment. 

A vote against NAFTA is a vote against all of the progress toward greening trade we 
have made so far. The defeat of NAFTA will signal a defeat of the ground-breaking 
approach that says that trade and the environment can indeed be reconciled. If NAFTA 
is defeated, the result will be polarization and finger pointing. 

Finallv. the fourth and last point I would like to make today is that the indirect impacts 
from NAFTA activities are manageable and where they affect my responsibilities I intend 
to manage them. The 1995 budget for border-related activities will address four major 
program areas: law enforcement, ecological services, fisheries, and refuges and wildlife. 
This money will ensure that there are sufficient wildlife enforcement agents to handle 
additional demands along the border, and provide support for special agents and for 
specific activities under the Wild Bird Trade Act. There will also be extra money directed 
to the FWS ecological services office for listing, consultation, and species-recovery 



79 



actions in Texas, New Mexico. Arizona, and California, as well as money to maintain the 
variety of aquatic habitats in the border region; through long-term monitoring, as well as 
programs to maintain water flow in the face of increased regional demands. 

For those of you like myself who were born, raised, and have worthed near the border, 
you know there are many problems down there. These problems have existed for a very 
long time. Congress has a choice. It can either confront these challenges directly, and 
support NAFTA as a cooperative foundation for North America to begin to address them, 
or it can reject this foundation and hope for the best. 

If NAFTA does not pass, those who vote to reject it can hope the Mexicans will stand 
by the commitments and actions they have already taken to protect the environment and 
open their markets. They can hope President Salinas will continue to commit scarce 
Mexican resources to wildlife refuges, environmental inspection, and enforcement on hjs 
side of the border. They can hope the huge array of cooperative environmental efforts 
between the United States and Mexico will continue to expand. You can hope the 
border will clean itself up, or that new export markets will simply appear of their own 
accord. But they better not count on it. 

Now, for the first time, along with its promise of increased economic ties, NAFTA brings 
with it a promise of strengthened cooperation and, finally, a definitive recognition of the 
very real connections between the United States and Mexico, at the highest political 
levels in both countries. With NAFTA, the border and our very real long-standing 
physical and economic interdependence with Mexico can no longer be ignored. NAFTA 
means an end to our short-sighted ignorance of our neighbors and a beginning of 
serious and sustained efforts to deal with our common problems. 



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TESTIMONY OF 

CAROL M. BROWNER 

ADMINISTRATOR 

U.S. ENVIRONMENTAL PROTECTION AGENCY 

BEFORE THE 

COMMfTTEE ON MERCHANT MARINE AND FISHERIES 

U.S. HOUSE OF REPRESENTATIVES 

NOVEMBER 10. 1993 



Good morning, Mr. Chairman and members of the Committee. I am 
delighted to be here today with Secretary Babbitt and Ambassador Kantor to tall< 
about the environmental benefits of the North American Free Trade Agreement 
(NAFTA) package. The U.S. has negotiated three agreements that will significantly 
enhance our ability to bring genuine improvement to the environment on the North 
American continent. These are: 1 ) the NAFTA with its green provisions; 2) the 
North American Agreement on Environmental Cooperation (the Environmental 
Agreement); and 3) the U.S.-Mexico Border Environment Cooperation Agreement. 
EPA has played a very significant role in the negotiation of all these agreements. 
In addition, EPA is continuing to move forward with the U.S.-Mexico technical 
cooperation program, a joint initiative between EPA, its Mexican counterpart 
SEDESOL, and other agencies from both governments. 

These Agreements and our ongoing cooperative program provide a unique 
opportunity: to create a substantial and precedential linkage between trade, 
environmental protection, and sustainable development; to accelerate ongoing 
efforts to improve public health; and to protect vital natural resources throughout 



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North America. For these reasons, I believe it is essential for our environment that 
this NAFTA package be approved by Congress. The agreements in this package 
will achieve advancements for environmental protection that will not occur without 
NAFTA's passage. These three agreements and the Border Action Program 
combine to offer at least eight powerful reasons to support NAFTA. 

1 . The NAFTA package provides a new framework for effective 
cooperation. NAFTA will significantly enhance both trilateral and bilateral 
cooperation. The package establishes an innovative trinational commission for 
environmental cooperation, which gives the U.S. an international mechanism to 
address complex environmental issues confronting an entire continent-including 
those related to trade-and to enhance the level of environmental protection 
throughout the region. As the U.S. representative on the new Commission for 
Environmental Cooperation, I intend to work closely with my colleagues at the 
Department of the Interior, the National Oceanographic and Atmospheric 
Administration, the U.S. Trade Representative, the Department of State, and other 
agencies to ensure that this commission develops into a vigorous and effective 
institution that is looked to around the world as the model for regional 
environmental cooperation. NAFTA will also enable us to further develop the 
cooperative relationship that has grown between Mexico and the U.S. 



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2. The NAFTA package will improve enforcement. Under the Environmental 
Agreement, NAFTA parties commit to enforcing their domestic environmental laws. 
This is the first time such commitments have been made in an international 
agreement, and the Agreement creates mechanisms to ensure that they are carried 
through. Under the agreement, any NAFTA country resident can bring a complaint 
about ineffective enforcement in any NAFTA country, including her ow/n, and the 
agreement also establishes a groundbreaking intergovernmental dispute resolution 
mechanism which can ultimately lead to sanctions and penalties for countries that 
persistently ignore their enforcement commitments. Most importantly, however, 
the Environmental Agreement allows opportunities for compliance, consensually 
arrived at, as a mechanism that will promote solutions to enforcement problems 
before the club of trade sanctions is used. NAFTA also creates mechanisms for 
trinational cooperation on enforcement issues. Our binational Border Action 
Program with Mexico will further enhance enforcement by promoting training and 
environmental monitoring along the border, building on the cooperation that I 
believe is essential to success in our border efforts. Implementation of these 
initiatives will result not only in a better environment, but also in a more level 
playing field as Mexico enhances enforcement of its already stringent 
environmental laws. 

3. NAFTA gives us tools to clean up the border. The agreement just 
negotiated with Mexico to establish a new Border Environment Cooperation 



I 



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Commission (BECC) to help border communities develop environmental projects 
and a North American Development Bank (NADBank) to provide financing will 
harness some $2 billion or more for environmental infrastructure projects for Border 
clean-up. A proposed EPA Border Office will further enhance our ability to respond 
effectively to Border problems. 

4. The NAFTA package embraces active public participation. The trade 
agreement itself was the first negotiated after a public review of potential 
environmental effects. The Statement of Administrative Action for NAFTA Chapter 
20 indicates various steps USTR will take to promote transparency in the NAFTA 
dispute settlement process. 

In addition, the Environmental Agreement contains a number of provisions to 
create "transparency" and promote public involvement. The Agreement creates a 
Joint Public Advisory Committee to advise the Council of Ministers and provide 
technical or other information to the Secretariat. It requires that the Council must 
hold public meetings in the course of all regular sessions. It requires publication of 
final reports of arbitral panels. It calls for reports of the Secretariat to be made 
public, unless the Council decides otherwise, and provides that reports of the 
Secretariat may be made public upon two-thirds vote of the Council. It also allows 
any citizen to bring a complaint about non-enforcement in any NAFTA country. 



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The Administration-and I personally--are committed to a number of specific 
additional actions to strengthen public involvement. In general, we will support 
making available to the public all non-confidential elements of reports, factual 
records, decisions, recommendations and other information gathered or prepared 
by the Secretariat or Council. In cases where written information is not made 
available, we will call for written explanations setting forth the reasons. In 
establishing the Model Rules of Procedure for dispute settlement under Article 28 
of the Agreement, we will seek to assure public access to panel proceedings, 
written submissions and panel reports and develop other mechanism for public 
access to and involvement in the process. We also will consult closely with other 
interested agencies on matters under the Agreement. 

5. NAFTA fully preserves the sovereign right of the U.S. and our states and 
localities to determine their own levels of environmental protection. This means 
that governments will continue to set their own environmental standards and be 
able to achieve higher levels of environmental protection, as they feel appropriate, 
by adopting more stringent measures than international or - in the case of political 
subdivisions — national measures. I want to emphasize that the agreement fully 
preserves the right of the U.S. to prevent any product from entering this country 
that does not meet our strict environmental standards. NAFTA and the 
Environmental Agreement also contain commitments and mechanisms to work 



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toward increased compatibility of standards while enhancing levels of 
environmental protection. 

6. The NAFTA package will discourage pollution havens. The Agreements 
contain important language in support of environmentally sensitive investment, and 
seel< to deter NAFTA countries from lowering their environmental standards or 
reducing enforcement of environmental laws in order to attract investment. The 
enforcement requirements of the Environmental Agreement combine forcefully with 
the NAFTA agreement to create a level playing field. 

7. NAFTA will create jobs. In particular, NAFTA will open up a major new 
marlcet for U.S. producers of environmental technologies, equipment and services. 
This will likely be a core sector of the twenty-first century national economy, and 
NAFTA will significantly enhance our ability to compete in this critical and 
increasingly dynamic market. 

Let me expand for a moment on the potential for increasing U.S. 
environmental exports. The Mexican market for environmental technologies, 
equipment and services has been conservatively estimated at $1.1 billion for 1992, 
with U.S. exports accounting for 45% of this total. The market as a whole is 
expected to grow between 15-20% in 1993-94 and U.S. exports are expected to 
grow between 15-55% depending on the sector, during 1993. These numbers will 



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grow even larger under NAFTA as Mexican citizens demand a cleaner environment, 
enforcement is beefed up, and the financial resources available for purchasing are 
increased. For example, the U.S. environmental technology industry can expect to 
export environmental monitoring services, solid waste handling equipment, 
catalytic converters, air pollution equipment, wastewater and water treatment 
plant technologies, and renewable energy technologies. 

The U.S. environmental technology industry would enjoy a competitive 
advantage due to proximity and free trade with Mexico. Today, Mexican tariffs on 
imports of U.S. pollution control equipment and services range from zero to twenty 
percent. Under NAFTA, tariffs on most pollution control equipment will be 
eliminated on the date of implementation of the Agreement or within five years of 
implementation, stimulating U.S. exports by further enhancing the relative price 
competitiveness of U.S. pollution control and equipment vis a vis similar products 
from non-NAFTA countries. 

In addition, the World Bank and Mexico have this year signed an agreement 
to finance §3 billion in pollution cleanup in northern Mexico over the next ten 
years. The funds, to be spent in 1994-96, consist of $1.8 billion in World Bank 
loans and $1.2 billion from the Mexican government. The funds would be used for 
improving water supplies, sanitation systems, and other environmental facilities, as 
well as addressing air pollution remediation, solid waste management, toxic waste 



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control, and biodiversity protection. U.S. providers of products and services are 
extremely well-positioned to compete for participation in these projects. 

Places like Boston, which have a high concentration of envirotech firms, 
stand to benefit greatly from NAFTA. For example, one Boston area company, 
HNU Systems, which manufactures equipment to monitor soil and grouQdwater 
contamination, has seen its business with Mexico increase from nothing in 1 989 to 
$2 million in 1992. Successes like this illustrate the kind of win-win outcome the 
NAFTA provides: more jobs for Boston and a cleaner environment for Mexico. 

8. NAFTA provides mechanisms for integrating trade and environmental 
objectives. The trade and environment debate of the last several years has taught 
us that, if it is to remain viable, the international trading system must be flexible 
enough to adapt to evolving priorities of sustainable development. Let me spend a 
few moments describing some of the ways in which NAFTA and the Environmental 
Agreement integrate trade and environment considerations to a degree we have 
never seen in a free trade arrangement. 

The NAFTA Itself includes broad statements of purpose to promote 
sustainable development and carry out the NAFTA in a manner consistent with 
environmental protection and conservation, it also includes a provision granting 
precedence to trade obligations in important bilateral and multilateral environmental 



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agreements, including the Montreal Protocol, the Convention for International 
Trade in Endangered Species (CITES), and the Basel Convention for the Control of 
Transboundary Movement of Hazardous and Other Wastes and their Disposal. This 
provision allows other environmental agreements to be added to the agreement. 
The Administration has already received Canada and Mexico's agreement to add 
the Migratory Bird Treaty, and will pursue with them the addition of other 
agreements. 

The Environmental Agreement further ensures that NAFTA activities have 
positive environmental impacts. The new Commission for Environmental 
Cooperation is specifically mandated to cooperate with the NAFTA's Free Trade 
Commission to achieve the environmental goals of the NAFTA. This is the first 
time that a body made up of high-level environmental representatives is formally 
linked to a trade agreement, and it will have a significant impact on the tenor of 
the trade and environment debate. For example, the Commission for 
Environmental Cooperation is called upon to contribute to the prevention or 
resolution of environment-related trade disputes. This means that potential trade 
disputes with environmental ramifications will be considered by environmental 
officials at an early stage in the process. 

As part of Article 10.2 of the Environmental Agreement, the Council of the 
Commission on Environmental Cooperation will also be embarking on a work 



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program to address a broad range of environmental issues in a new. North 
American context. Items identified in the Agreement for early consideration by the 
Council include such diverse issues as development of pollution prevention 
techniques and strategies, long range transport of air and marine pollutants, and 
approaches to environmental compliance and enforcement. 

A work program item that is of particular interest to this committee and to 
me is the consideration of the "environmental implications of goods throughout 
their life cycles," which captures the "processes and production methods" (or 
"PPMs") issue. I personally intend to work hard to make this a priority item as the 
U.S. representative to the Commission. I am aware that this has been an 
exceptionally complex and sensitive issue which has been the subject of extensive 
discussions in the GATT, the OECD and other fora, and one that is likely to take 
some time to resolve to our satisfaction in these fora. The Commission for 
Environmental Cooperation offers a promising forum for reaching agreement on 
trade rules concerning how goods are processed and produced. Our work with 
Mexico and Canada could precipitate a change in the way the international 
community views PPM-based trade measures. When discussions take place in the 
Commission on Environmental Cooperation, they will take place among high-level 
environmental ministers. I want to emphasize that no forum like this exists in the 
context of any other trade agreement. 



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NEW COORDINATING AND FINANCING MECHANISMS 

Shortly after I was confirmed, I visited the Border. I was deeply disturbed by 
the environmental conditions suffered by U.S. citizens living there. This trip 
persuaded me of the importance of NAFTA and its accompanying environmental 
provisions. The NAFTA package provides tools to address these problems along 
the border. NAFTA and the supplemental agreements, far from contributing to the 
problem, provide new and effective solutions. 

With respect to the border environment, an important element of the NAFTA 
paclcage is the border environmental infrastructure financing agreement recently 
completed with Mexico. This agreement will create two important new institutions 
to help bring down the barriers to environmental infrastructure development in the 
border region. 

The first institution, the Border Environment Cooperation Commission (the 
BECC), will serve a pivotal role in coordinating the diverse needs of Border 
communities and their residents, and providing the technical and financial support 
to states and local communities on both sides of the Border. The other new 
institution, the North American Development Bank (NADBank) will provide $2 
billion or more in loans and guarantees to fund BECC-certified projects. Together 



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with other resources, up to $8 billion is expected to be available over the next 10 
years to meet the environmental infrastructure needs of the border communities. 

The U.S. side of the U.S. -Mexico border suffers from serious public health 
and environmental conditions. Nowhere else in the U.S. are such large populations 
exposed to raw sewage, and without such basic necessities as water and 
wastewater facilities. Because of the patchwork of competing jurisdictions, 
population growth along both sides of the border, and levels of income well below 
other parts of the country, there remains an urgent need for increased capital 
investment, as well as improved cooperation among the many states, communities, 
private interest groups and financiers in the development of environmental 
infrastructure projects in the region. EPA is working closely with the U.S. Public 
Health Service and affected states to assess environmental public health concerns 
along the U.S. /Mexico border. These assessments will develop important 
information for use in pollution control and public health efforts. 

The BECC would be a new international, bilateral organization that would 
assist border states and communities in planning, coordinating, and developing 
environmental infrastructure projects in the border region. In conjunction with the 
NADBank as a source of funds, the BECC would also assist states, communities 
and private parties in securing financing for these projects. Primarily, the BECC 
would review projects for technical, environmental, and financial feasibility and 



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soundness. The BECC would also act as a packager of financing, turning to the 
NADBank, private markets, international banking institutions, or governmental 
sources for funding. To be eligible for NADBank financing, a project would have to 
be certified by the BECC, assuring that it will meet general environmental criteria. 
The NADBank itself would not decide on the environmental aspects of projects. 
BECC-certified projects would rely on private sector financing and user fees to the 
maximum extent feasible. 

The BECC Board of Directors would consist of 10 members, 5 from each 
country. The U.S. members would include the International Boundary and Water 
Commissioner, the Administrator of the U.S. Environmental Protection Agency, one 
representative of a state on the U.S. -Mexico border, one representative of a 
community in the border region, and one member of the public from the border 
region, who could be from a non-governmental organization. No project could be 
certified without the majority vote of each country's members of the Board. All 
members of the Board will have environmental, financial or other expertise relevant 
to border environmental infrastructure. 

In addition, the BECC will also have an Advisory Council of 1 8 members, 
who will consist of representatives of the border states, localities, local community 
groups, and members of the public, including at least one member of a non- 
governmental organization. Before the BECC may certify a project, it must consult 



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with the Advisory Council, as well as issue public notice and provide an 
opportunity for public comment and conduct environmental assessments. All 
projects must at least meet the environmental standards of the area in which they 
would be built. Projects having a significant transboundary impact will also be 
subjected to a heightened level of scrutiny including environmental assessment 
requirements, and mandatory consultation with affected states and local 
communities, and may not go forward without a determination by the Board that 
the project meets the conditions necessary to achieve a high level of environmental 
protection. 

COOPERATIVE PROGRAMS WITH MEXICO 

Finally, let me explain how the programs included in the NAFTA package will 
enhance our ongoing cooperative programs with Mexico, particularly in the border 
area. 

U.S.-Mexican bilateral environmental cooperation is an important component 
of our efforts to protect public health and environmental resources in the United 
States. Environmental problems and their solutions know no national boundaries. 
Aquifers, surface water resources and air basins are often shared. Consequently, 
the problems associated with such resources require cooperative solutions. 



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I want to emphasize that the environmental issues that we face with Mexico 
predate NAFTA, and they will continue whether NAFTA passes or not. Addressing 
them effectively requires, more than anything else, a cooperative attitude with 
Mexico. Real solutions can only be achieved with the good will of both parties. 

We have had an agreement with Mexico to address border environmental 
and conservation issues since 1983. But it is in the last several years that the 
agreement has really become effective, primarily through the increased priority the 
Mexican government has placed on the environment and, more broadly, on its 
relationship with the United States. As a result of this new attitude, we have seen 
dramatic improvements in Mexican attention to common border problems. 

In early 1992, the U.S. and Mexico jointly released the first Integrated 
Border Environmental Plan for the U.S.-Mexico Border Area. On October 26, I met 
with the Mexican Secretary of Social Development, Luis Donaldo Colosio, in 
Enseneda, Mexico, to release a report summarizing the progress made by our 
countries during the first 18 months of this plan, and to agree on priorities for the 
coming year. It was also agreed that EPA-SEOESOL will develop options for 
preparing a new comprehensive, action-oriented Border program which would 
encompass not only their activities but also the activities of the two nations' health 
and conservation agencies. Secretary Colosio and i also issued a joint 
communique, a copy of which is attached to my testimony. 



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I am pleased by the progress that has been made on both sides of the 
Border to strengthen the enforcement of environmental laws. SEDESOL's new 
office of the attorney general for environmental protection, headed by Dr. Santiago 
Onate Laborde, has launched a comprehensive inspection program, carrying out 
more than 1 6,000 inspections which have resulted in the temporary closures of 
over 1,300 plants, and the permanent closure of over 100 plants. Over 2400 of 
these inspections were in the border area, resulting in 260 temporary plant 
closures. In June, 1992 Mexico and the United States announced a number of 
enforcement actions jointly targeted in the border area. Mexico conducted 42 
inspections, discovering violations at 22 facilities, and resulting in eight shutdown 
orders and four bond forfeitures. The U.S. undertook 17 enforcement actions, 
including two criminal indictments seeking $2 million in penalties . 

In addition, we have made considerable efforts to improve the tracking of 
hazardous waste across the border. We have worked together with SEDESOL to 
develop a computerized tracking system, and its utility for enforcement targeting 
has now been demonstrated with the filing of four U.S. Administrative 
enforcement cases in June, 1993. Based on information captured by this data 
base, we are now seeing a clear increase in compliance by maquiladoras with 
Mexico's requirement to return maquiladora waste to the country of origin of the 
raw materials for proper disposal. This information corroborates SEDESOL's view 
that their aggressive inspection program is working to increase compliance by the 



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maquiladora sector with Mexico's environmental requirements. In addition. 
Congressional approval of NAFTA may provide incentives for new maquiladoras to 
establish their operations outside the border area. Both U.S. and Mexican Customs 
agencies are exchanging information that has already led to more effective 
enforcement. Case-specific cooperation initiated the clean-up of illegal waste sites 
in Mexico and investigations into U.S. /Mexico violations of hazardous wastes 
export requirements. Customs inspectors from both countries are coordinating 
inspection operations and a series of joint enforcement training programs have 
been initiated. 

During the coming year, we expect to further increase binational 
environmental enforcement efforts, to expand air monitoring and control programs, 
and to move forward on binational water and sanitation projects as well as in the 
colonias of Texas and New Mexico. In addition, we will continue to explore 
innovative solutions to Border problems such as the air pollution problems in the El 
Paso/Juarez air basin. 

The new Border financing mechanisms and the activities mandated in the 
Environmental Agreement will be closely linked to our new programs. In fact, the 
environmental planning which will be undertaken by the sister cities in the Border 
area will help identify priorities not only for environmental infrastructure 
investments but for technical assistance and training as well. Even now many 



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sister cities are involved in joint planning for the provision of health services, for 
emergency preparedness and prevention, as well as air monitoring. 

At our meeting in Ensenada in October, EPA and SEDESOL established a 
binational technical work group to develop measures to preserve air quality and to 
address existing situations of substantial air quality degradation, including visibility 
problems at Big Bend National Park--another example in which a strong cooperative 
relationship provides the best means for solving transboundary problems. The 
workgroup will make recommendations as to measures to be implemented in both 
countries to ensure that growth occurs in a manner that prevents significant 
deterioration of air quality in the region. 

Part of the reason that the Mexicans have decided to take their 
responsibilities seriously is the enticement of NAFTA. But the real reason is even 
more basic than this. It comes down to the fact that President Salinas has taken 
the bold step of confronting Mexico's fears of the United States and charting a 
new course of cooperation with the United States. This new relationship has paid 
off handsomely for us, not only economically and politically, but in the form of 
enhanced environmental protection as well. I consider significant, for example, the 
remarkable reduction of incidental kill rate of dolphins by Mexican tuna fishermen- 
over 90% over the last three years. 



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CONCLUSION 

In conclusion, as the U.S. economy is increasingly integrated with that of its 
neighbors, we must recognize that the U.S., Mexico and Canada have in most 
respects a shared environment. We must live and work and plan together if we are 
to prosper economically and effectively protect our domestic environments. The 
NAFTA, the Environmental Agreement and the proposed financing mechanism will 
significantly supplement and enhance our ongoing cooperative programs to protect 
human health and natural resources. 

I would be happy to answer any questions you or the members of the 
Committee may have. Thank you. 



99 



ADELAIDE • AMSTERDAM • ANCHORAGE • AUCKLAND • BRUSSELS • BUENOS AIRES • CHICAGO • COPENHAGEN • DUBUN 
GOTHENBERG • HAMBURG • LEWES-U K • LUXEMBOURG • MADRID • MONTREAL • NEW YORK CITY • OSLO • PALMA DE MALLORCA 
PARIS • ROME • SAN FRANCISCO • SAN JOSE— COSTA RICA • SEATTLE • STOCKHOLM • SYDNEY • TORONTO • VANCOUVER • VIENNA 
^^^^ WASHINGTON • ZURICH 

Greenpeace 

Greenpeace • 1436 U Street NW • Washington DC 20009 • Tel (202) 462-1 1 77 
Tlx 89-2359 • Fax (202) 462-4507 



THE NORTH AMERICAN FREE TRADE AGREEMENT 
AND THE ENVIRONMENTAL SIDE ACCORD 



Testimony of 
GREENPEACE 



before the 

COMMITTEE ON MERCHANT MARINE AND FISHERIES 

UNITED STATES HOUSE OF REPRESENTATIVES 



by 

Barbara Dudley 
Executive Director of Greenpeace U.S. 



November 10, 1993 



RECYCLED PAPER 



100 



Greenpeace 
November 10, 1993 



Executive Summary 

The North American Free Trade Agreement (NAFTA) is a fundamentally anti-environment 
agreement, particularly in its treatment of environmental standards, energy resources, 
conservation issues, and agriculture. In September, President Clinton signed the "North 
American Agreement on Environmental Cooperation" with Mexico and Canada as a 
supplemental agreement to the NAFTA, establishing a Commission for Environmental 
Cooperation. Greenpeace and other environmental organizations have expressed serious 
reservations about the viability of this approach for addressing the adverse consequences 
that \yould result from the NAFTA. We oppose this NAFTA, and we urge Congress to set 
it aside and to work toward a sustainable trade and developm ent agreement. 

The NAFTA, and its predecessor the Canada-U.S. Free Trade Agreement, tends to brand 
environmental regulations as non-tariff barriers to trade. Under the FT A, for example, 
government and industry have challenged requirements to reduce the emissions of polluting 
smelters and have gutted provincial government reforestation programs. The NAFTA 
provides no means of trade-linked enforcement of environmental, labor, health or safety 
standards. The agreement also undermines strategies to slow global warming, achieve 
energy conservation, and promote sustainable agriculture. 

We have concluded that the Agreement promotes a brand of "trickle down" economic 
integration that benefits a small sector in each country at the cost of rising inequalities and 
continued degradation of the ecosystems on which we and future generations depend. We 
advocate rejection of NAFTA and the initiation of new negotiations to craft rules that 
encourage mutually beneficial trade and investment. Our countries can reduce trade 
barriers and remove some obstacles to investment, as long as we embrace a new framework 
of initiatives for our continent that steer trade and investment to promote a healthy 
environment, fair paying jobs, and democratic and self-reliant communities. 



Greenpeace 
November 10, 1993 



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INTRODUCTION 



Chairman Studds, members of the Committee. I am Barbara Dudley, U.S. Executive 
Director of Greenpeace, an international environmental organization working for a safe and 
nuclear-free world, clean air and water, the protection of terrestrial and marine wildlife and 
their habitats, and the development of an environmentally responsive economy. We are 
pleased to have been invited to appear before the Committee today to offer our views on 
the North American Free Trade Agreement and the side accord on the environment. 

As a presidential candidate in October 1992, Bill Clinton endorsed the NAFTA with the 
stipulation that two "side" agreements address the agreement's harmful effects on workers 
and the environment: "The (Bush) agreement contains no mechanism for public 
participation in defending challenges to American laws if we apply our environmental laws 
against Mexican products, or in bringing challenges to the practices of other parties" 
(Clinton, p. 13). 

Candidate Clinton called for the establishment of an independent commission "..with 
substantial powers and resources to prevent and clean up pollution. It ...would have the 
power to provide remedies, including money damages and the legal power to stop pollution," 
said Clinton. He also specifically noted that the NAFTA protected the property rights of 
U.S. corporations but "...is silent with respect to labor laws and the environment." 

The environmental side accord may represent the fulfillment of the President's goal, but a 
closer look reveals it as little more than an effort to divert citizen opposition to the NAFTA 
an effort that leaves the agreement's worst elements untouched. The side accord represents 
a retreat from the draft proposed by the U.S. Trade Representative in May. It provides a 
striking contrast to the detailed protection of the property rights of American companies 
that Clinton noted in his 1992 speech. 

Based on in-depth analysis of the side accord, outlined in this testimony, Greenpeace 
believes the North American Agreement on Environmental Cooperation overwhelmingly 
fails to address the basic environmental threats contained in the North American Free 
Trade Agreement. 

The most serious problem with the NAAEC is its complete silence regarding the vast 
majority of concerns raised by citizens trying to protect the environment. Particularly 
disturbing is its failure to address the serious effects that deregulated trade will have on 
resource conservation initiatives, sustainable agricultural production, "green" procurement 
policies, and efforts to sustain biodiversity. At the same time, the document does little to 
alleviate the pressure created by the NAFTA to undermine environmental, workplace, and 
food safety regulation. This "environmental proviso" also offers nothing more than 



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continued negotiation to clean up the environmental disaster zone along the U.S.-Mexican 
border - the product itself of two decades of free trade there. On these and many other 
issues, the side accord repeatedly sidesteps or avoids vital concerns while addressing others 
with only weak and minimal measures. 

ANALYSIS OF ENVIRONMENTAL SIDE ACCORD 

Because of the environmental, health or safety problems which could result from NAFTA, 
we supported President Clinton's concept of a tough North American environmental 
commission. After seven months of working with the Administration to repair NAFTA's 
flaws, we were disappointed to see the results of the supplemental negotiations. Most of 
our concerns never made it onto the negotiating table. Our analysis of the major elements 
of the environmental side accord follows: 

1. Public Participation 

The side agreement makes some laudable steps in opening the proceedings of the 
Conmussion for Environmental Cooperation (CEC) to public oversight and by establishing 
the Public Advisory Committee. The public does have the right to request an enforcement 
proceeding and may submit information for inclusion in Secretariat Reports. 

However, the public can only petition the CEC for a limited and informal review of a 
dispute. Numerous convoluted steps must be taken before such a review can occur, and 
even then, it can be based only on such information as is publicly available. The CEC 
Council then holds the right to decide whether to release the review to the public or not. 

The process actively discourages public participation: final reports of the Secretariat will 
be made public only if all members of the Council agree; most meetings of the Council may 
be closed to the public; and even the Public Advisory Committee will receive a "factual 
record" only on a 2/3 vote of the Council. And requests for information by the Council or 
the Secretariat and the responses received from the governments also will not be available 
to the public. 

Finally, there is no requirement that the governments ensure that a diversity of interests are 
represented in their Advisory Board appointments. No role is given to the Advisory Board 
in proceedings of the dispute panels, as the Board is limited to non-binding 
recommendations on CEC administrative matters and reports. 

2. EnlbrcanMnt and Trada Sanctions 



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Key to Greenpeace's recommendations for a successful enforcement mechanism was a 
process that would: a) respond to a wide range of enforcement problems before the 
environmental damage is done; b) provide a forum for substantive consultations to eliminate 
the harm; and c) provide for a quick resort to trade sanctions should the parties be unable 
to resolve their differences cooperatively. 

The business community would dismiss as preposterous the suggestion that its interests be 
protected by an international commission with no direct or meaningful authority, or by a 
dispute resolution process with an impossibly high threshold of complaint. In fact, NAFTA 
rules and U.S. trade law provide swift, effective sanctions for any breach of the agreement 
that may prejudice the interests of business. 

Not so for the environment. Defenders of the NAAEC may point to the provision that 
allows the CEC or a NAFTA country to refer a problem to dispute resolution and 
eventually sanctions, when it can show that another NAFTA country has demonstrated "a 
persistent pattern of failure to effectively enforce" its environmental laws. These provisions 
will not apply to Canada, but they are offered as giving "teeth" to the Mexican-U.S. elements 
of the side agreement. But the prospect of environmental trade sanctions is little more than 
a smokescreen. The process places an onerous burden of proof on the challenging party, 
followed by a dispute process so cumbersome, time-consuming, and uncertain that it is 
unlikely ever to be invoked, much less concluded effectively. Mexico's top trade negotiator, 
Jaime Serra Puche, admits as much in his comment that, 'The time frame of the process 
makes it very improbable that the stage of sanction could be reached."' 

The path to trade sanctions is further obscured by the absence of a NAFTA or NAAEC 
requirement that environmental protection standards be constantly upgraded. It is only 
when countries persistently fail to enforce their existing environmental laws that they face 
the threat of trade sanctions or other penalties. There is no penalty ^or not creating 
regulations in the first place. Ironically, a country wishing to minimize the risk of trade 
sanctions may simply avoid environmental regulation altogether. 

To proceed to the stage of convoking an arbitral panel, with the possibility of fines or 
sanctions, requires a two-thirds vote of the Council. The U.S. representative would have to 
persuade his Mesxican counterpart to pursue further a Canadian violation, for example. 
Mexico, however, from the outset of the negotiations, opposed the use of trade sanctions for 
non-enforcement of environmental laws. It is unlikely that Mexico would accede to U.S. 
wishes on this subject. 



' Ingrid Negrette. "Mexico Official Defends Nafta Dispute Process" The Journal of 
Commerce, August 20, 1993, p. 3A. 



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But even if it were possible to navigate this convoluted procedure, the final text provides 
an escape that is so broad it virtually guarantees that sanctions can never be invoked. In 
the definition of effective enforcement, the accord excuses inaction when such failure "(a) 
reflects a reasonable exercise of their discretion in respect of investigatory, prosecutorial, 
regulatory or compliance matters; or (b) results from bona fide decisions to allocate 
resources to enforcement in respect of other environmental matters determined to have 
higher priorities" (Article 45.1). In other words, a government may avoid the charge of 
"failure to enforce" simply by arguing that it had overriding enforcement priorities elsewhere. 



Corporate Property Righte Protected Under NAFTA 

The failure of the Clinton administration negotiators to secure effective enforcement of 
environmental protections stands in sharp contrast to the protection obtained by the Bush 
administration in NAFTA for the property interests of U.S. corporations. Mexico had 
previously required foreign investors to incorporate a certain percentage of 'domestic 
content' in their products. NAFTA's Chapter 11 prohibits this and other mechanisms 
governments have used to regulate foreign investment. 

Similarly, the Bush negotiators in Chapter 17 required Mexico to change its intellectual 
property laws (protecting patents) to conform to an international standard more acceptable 
to the U.S. NAFTA negotiators explicitly sought upward harmonization in the area of 
intellectual property rights. 

The enforcement of these property rights under NAFTA provides a revealing contrast with 
the loophole-ridden trade sanctions provided in the environmental side accord. An 
individual violation of a copyright is immediately actionable. There is no need to prove a 
'persistent pattern" of failure to enforce the law. The offending property can be 
immediately confiscated and even destroyed, as can the materials used to produce it 
(NAFTA Article 1715.5). The penalties provided for violation of intellectual property rights 
are deliberately strict, "in order to create an effective deterrent to infringement." And there 
is no loophole allowing a govenunent to avoid responsibility for enforcing its intellectual 
property laws, no matter how pressing its priorities elsewhere may be. (See Levinson, "The 
Labor Side Accord to the NAFTA", Economic Policy Institute, 1993, for a comparison 
between NAFTA's Chapter 17 and the labor side accord.) 



3. Natural Resources: No Longsr An Envir o n m ent a l issue 

If the substance of the NAAEC is disappointing, its most serious flaws can be found in what 

5 



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it chooses to ignore entirely. By far the most serious of these omissions is its complete 
failure to address natural resource issues. Over the long term, it will be the NAFTA's 
unsustainable resource policies that cause the greatest damage to the environment. 

Entirely ignored by the NAAEC are NAFTA rules that: 

* provide special status to government subsidies for oil and gas projects, protecting 
them from the challenge as unfair trade practices, while leaving government support 
for energy efficiency and conservation entirely vulnerable to such attack (AJticle 
608); 

• require, with few exceptions, all NAFTA countries to provide the others with the 
same access to its natural resources that it allows its own citizens and domestic 
industry (Article 603 for energy and Article 309 for all other natural resources); 

• prohibit governments from discriminating against foreign companies or markets by 
imposing export taxes or other charges (Articles 604 and 315); and, 

* guarantee foreign access to a share (determined by trade practice) of natural 
resources for as long as those resources last, no matter how severe domestic 
shortages become (Articles 60S and 316). 

Rather than address these serious impediments to sustainable resource management 
initiatives, NAAEC actually consolidates the destructive resource "policies of the NAFTA 
text. This was accomplished by way of a last minute revision to the side agreement that 
narrowly defines "environment" to exclude natural resources management. In this way the 
CEC is precluded from even considering poor or destructive resource policies no matter how 
harmful they may be for the environment. 

Thus excluded from oversight by the CEC or any other application of the side deal are the 
following environmental threats: 

* Qear-cut harvesting of old growth forests 

* Strip mining 

* Large inter-basin transfers of water resources 

* Destruction of coastal fisheries due to mismanagement and overfishing 

* Large energy projecu that destroy fragile ecosystems or native lands, such as the 
James Bay hydroelectric project 

By very definition, the ecological disasters that these projects and policies can cause will not 
even be considered "environmental issues' under the NAAEC. By adding this constraint to 
the CECs authority, the governments of the United States, Mexico, and Canada virtually 



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November 10, 1993 

concede that the NAFTA will promote destructive natural resource policies and take steps 
to ensure that the side deal does not become a vehicle for challenging them. This does not 
mean that resource management issues will not remain the subject of international trade 
disputes. In fact, the recent trend to use trade disputes to attack resource conservation 
initiatives (fisheries and forest conservation programs) will certainly increase under the 
NAFTA. 

4. Protecting Corporate Agriculture. . . at the Cost of Family Farms 

As with natural resource use, sustainable agriculture is also not considered an 
"environmental" issue by the NAAEC. Thus the side accord ignores the enormous 
environmental damage caused by the very agricultural policies and practices that the 
NAFTA intends to perpetuate. 

Within the NAFTA, discussions about agriculture, the environment, and trade are narrowed 
to a debate over food safety and pesticide regulation. This narrow focus serves as another 
smoke screen for the real issue. Food safety, while a high-profile and important public 
concern, is merely a symptom of unsustainable agricultural production. The cause is the 
unregulated agricultural trade policies that NAFTA seeks to entrench and that will make 
the increased use of pesticides inevitable, accelerate the loss and erosion of farmland, 
displace agricultural communities, devastate rural economies and increase the energy and 
chemical intensity of agricultural production. . 

The environmental and agricultural implications of the NAFTA's provisions for intellectual 
property rights also fall by the wayside. Chapter 17 of the NAFTA provides protection for 
patents, copyrights, and trade secrets to some of the world's largest companies, substantially 
strengthening the monopoly control of these global corporations. In the realm of 
agricultural production, these rules will allow large chemical and pesticide companies to 
control farm production by providing patent protection for biologically engineered seed 
varieties. No similar property right is given to the communities that may have nurtured 
indigenous plant species for generations - species from which the hybrid seed was first 
derived. This double standard will diminish biodiversity, perpetuate chemical intensive 
farming, and frustrate efforts to put agricultural production on a sustainable footing. 

5. A Blow to Green Procurement 

Government procurement policies will also suffer through the trade deal and its side 
accords. The United States and other countries have successfully used public purchasing 
policies to stimulate technological innovation in the areas of energy efficiency, recycling, and 
clean technology. NAFTA procurement rules constrain the ability of governments to 
continue such practices; by viewing green procurement requirements as barriers to trade. 



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they undermine the ability of U.S. companies to keep pace in the global market for 
environmentally sound technologies and products. The environmental accord, which might 
have enhanced green procurement opportunities, instead does nothing to ease this 
constraint. (See "NAFTA: Procurement Rules and the Conflict with Green Purchasing 
Policies," A Greenpeace Policy Brief, Washington DC, September 1993.) 



6. Product and Production Standards 

NAFTA contains two chapters that specify when environmental standards can limit imports 
of food, other goods and services. Many U.S. federal, state and local laws limit access to 
the U.S. market. For example, U.S. law prohibits the sale of food containing dangerous 
pesticides or products containing toxic substances. 

NAFTA's two chapters on standards. Sanitary and Phytosanitary Standards (Chapter 7) for 
food and Technical Barriers to Trade (Chapter 9) for all other standards, contain ambiguous 
terms that could expose legitimate environmental laws to trade challenge. The ambiguity 
of these terms caused the groups now supporting NAFTA, as well as those opposed to 
NAFTA, to ask for clarification of certain key terms in the supplemental accord. Because 
these terms were not clarified, their interpretation would be left to the trade lawyers who 
will serve as dispute resolution panelists if an environmental law is challenged. 

The NAFTA standards provisions may be interpreted as generally encouraging 
"harmonization" of standards towards lower international standards. NAFTA puts in place 
numerous committees with broad policy jurisdiction, and establishes detailed procedures for 
"conformity assessment" and other harmonization mechanisms. Standards-setting is a matter 
for local, state, and federal democratic bodies to determine, and should be subject to trade 
disciplines only where a law is facially discriminatory. 

Of more direct concern to this Committee is the fact that the environmental side agreement 
does not protect U.S. wildlife and animal protection laws from being challenged under 
NAFTA. As currently drafted, NAFTA would permit Parties to challenge legislation such 
as the High Seas Driftnet Enforcement Act and the Internauonal Dolfin Conservation Act 
on the basis that they create barriers to trade. Each of these laws regulates the method by 
which animals are caught or harvested. In trade terminology, this type of regulation is 
called a "process standard," and is termed a "technical barrier to trade" under both NAFTA 
and GATT. The environmental side accord does not change these NAFTA provisions which 
threaten existing conservation and wildlife protection laws and which would have a chilling 
effect on the establishment of future environmental regulations. 



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November 10, 1993 

7. Finance for Border Infrastructure and Clean-up 

The accord does not guarantee that the CEC will be funded adequately, nor does it address 
the enormous costs of cleaning up the pollution left by 25 years of free trade along the 
Mexico-U.S. border (the Sierra Club has estimated a minimum cost of $21 billion). Here, 
the trade negotiators have side-stepped the polluter-pays principle for funding this effort. 
The prospect that general tax revenues may be used to cover the costs of border clean-up 
not only violates sound environmental policy, but would also force taxpayers to subsidize 
companies that have moved to the border area of Mexico to escape U.S. taxes, wages, and 
environmental laws. 

8. The CEC Cannot 'Fix* NAFTA's Fundamental Flaws 

The environmental side accord proposes to create a huge bureaucracy: a Ministerial 
Council; a Secretariat; a Joint Public Advisory Committee; National Advisory Committees; 
and Governmental Committees. But this bureaucracy would be built on very shaky 
foundations: 

(1) Limits placed on the term "effective enforcement" will permit the governments 
to argue that they are not in violation of the Agreement while non-enforcement continues. 

(2) The Secretariat has been stripped of the independent powers with which it was 
invested in the original U.S. negotiating draft; it has no independent investigative ability 
and must instead use information requested from allegedly offending Parties. 

(3) The convocation of an arbitral panel to consider a country's "persistent pattern" 
of failure to enforce its environmental laws has been made subject to a veto by the non- 
participating country. 

(4) Any country charged with a "persistent pattern of failure to effectively enforce" 
its own law may defend itself by arguing that it had higher priorities elsewhere. This 
provision alone guarantees that no enforceable action can ever be effectively pursued. 

The recurrent theme of the negotiation of the environmental side accord is that, for the 
Clinton administration, like its predecessor the Bush administration, protection of the 
property rights of U.S. corporations is more important than the protection of environmental 
and worker rights. What the NAFTA did not tolerate in protecting corporate interests- 
vague standards, loopholes, aborted remedies-is embraced in the environmental side accord. 



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NAFTA Will Harm the Environment in All Three Countries 

According to the Clinton administration and NAFTA's corporate supporters, economic 
backwardness is the main cause of environmental damage in Mexico. Although they admit 
that there are problems with both environmental legislation and standards, they insist that 
the solution is primarily technical: the budget of Mexico's environmental agency, SEDUE, 
is low; there are not enough trained SEDUE inspectors; and the country lacks the resources 
to import environmental technology. 

These NAFTA supporters claim that NAFTA will solve these problems. It will provide 
economic growth, which will create the financial resources to improve enforcement of 
environmental laws and prevent further ecological degradation. Canadian and U.S. firms 
can provide the needed technology for resource management and conservation. 

What NAFTA's corporate sponsors ignore is that it has been the deregulated, 'free market' 
reforms imposed on the U.S. and Canadian economies in recent years that have caused a 
rising incidence of poverty and environmental crisis. Massive deforestation in the Pacific 
Northwest, the closure of Newfoundland's cod fishery due to over-fishing, the expansion of 
the U.S. factory trawl fleet in the Northern Pacific, and oil drilling are hallmarks of the last 
decade's environmental deregulation. So-called economic growth in the maquiladora border 
region has brought a toxic nightmare. This NAFTA will only deepen the social and 
environmental crises and weaken our governments' ability to solve them. 

In Mexico, as in the U.S. and Canada, NAFTA will benefit a small group of wealthy 
entrepreneurs who have a clear history of QQi passing on the benefits of new investments 
to workers or consumers. Funhermore, the Mexican government has an explicit strategy to 
compete internationally through low wages and lax enforcement of environmental and health 
standards. 

Unless a new NAFTA explicitly embraces strict enforcement of environmental standards and 
labor rights and includes measures to raise Mexican wages, there will be no "trickle down," 
and it will be impossible to build more equitable and sustainable development anywhere on 
the continent. Nor, for that matter, will it be possible to achieve balanced trade within the 
region. Likewise, any new agreement should also address Mexico's huge foreign debt 
burden, which further stimulates social and environmental "dumping." 

The Canadian Election: A Mandate for Renegotiation 

The results of the Canadian election two weeks ago has cast the fate of NAFTA into an 
entirely new light, and underscores the need for Congress to be even more sceptical about 
this NAFTA. As many here will know, a Liberal Government has been elected in Canada 

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November 10, 1993 

with comfortable majority of seats in the Canadian Parliament (176 of 295). 

The Liberal party is opposed to both the Canada-US Free Trade Agreement and NAFTA, 
as it is presently drafted, and is committed to a policy of renegotiating both trade 
agreements to address several broad trade policy issues including: 

• a subsidies code 

• an anti-dumping code 

• a more effective dispute resolution mechanism, and 

• the energy provisions of both trade agreements 

The Liberal Party took a position that was vigorously opposed to the implementation of the 
Canada-US Free Trade Agreement in 1988. Since that agreement has been in place, the 
Liberals have reiterated their view that CUSTA was not in Canada's interest. 

Very recently the Party articulated its position on free trade as part of its election platform. 
In its statement on CUSTA and NAFTA, the Liberal Party was unequivocal in stating its 
intention to renegotiate key aspects of these trade agreements. The Party's statement was 
also explicit that abrogation of CUSTA, while a last resort, would be the alternative should 
efforts at renegotiation fail. 

While legislation to implement NAFTA was passed by the Conservative Government before 
it called the recent election, that legislation will not come into effect unless ratified by the 
Cabinet of the new Canadian Government. Therefore it seems clear that NAFTA's fate in 
Canada now depends upon the willingness of the United States and Mexico to meet 
Canadian demands to reopen key areas of the trade deal. 

The other factor that will bear upon the choices that may be made by the new Liberal 
Administration in Canada is the extent to which it has been given a mandate to repudiate 
the trade policies of the Mulroney Government. As observers of the Canadian 
political scene will know, the most remarkable aspect of the Canadian Federal election is 
that it represented an absolutely unprecedented rejection of the Conservative Government's 
agenda. 

In what could be described as sea change of the Canadian political landscape, the 
Conservatives were reduced from holding 157 to holding only two seats in the Canadian 
Parliament. Yet the Conservative Party has been as much a mainstay of the Canadian 
political system as the Republican Party is in the United States. Now the Conservatives don't 
even have enough seats to qualify for official status to the Canadian Parliament. 

These astonishing election results could not represent a more unequivocal rejection of the 

11 



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Greenpeace 
November 10. 1993 

Conservative Government agenda, and there is no other initiative that is more central to 
that agenda than deregulated trade. The new Liberal Government has to read these results 
as a clear mandate to pursue an entirely different direction on international trade. 

While the C9nadian Government is considering its options, it would be reckless for the 
United States to proceed to ratify this NAFTA. Congress should not feel compelled to rush 
through a trade deal to meet an artificial schedule dictated by political administrations 
whose policies have been rejected. 

Conclusion 

For those voters and Members of Congress who had hoped that President Clinton would 
reject the anti-environment policies of the Reagan and Bush administrations, his approach 
to the NAFTA offers a rude awakening. By seeking to entrench environmentally harmful 
policies in multilateral trade agreements, supporters of the NAFTA put real environmental 
improvement and sustainable growth beyond the reach of successive administrations across 
the continent. The side accord could have been designed to provide real safeguards to the 
environmental health of citizens in all NAFTA countries. Instead, the lack of protection 
offered to the environment and labor in the current accord simply strenthens Greenpeace's 
opposition to the NAFTA. 



12 



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Sierra 
Club 




408 C Street, N.E. Washington, D.C. 20002 202-547-1141 

STATEMENT OF 

CARL POPE 

EXECUTIVE DIRECTOR 

SIERRA CLUB 

regarding 

THE NORTH AMERICAN FREE TRADE AGREEMENT 

before the 

HOUSE MERCHANT MARINE AND FISHERIES COMMITTEE 

SUBCOMMITTEE ON 

ENVIRONMENT AND NATURAL RESOURCES 

November 10, 1993 



Mr. Chairman, members of the Subcommittee, I am Carl Pope, 
Executive Director of the Sierra Club. I am very pleased to be given this 
opportunity to appear before you today to give you our views on the 
environmental impacts on the North American Free Trade Agreement. 

I would like to divide my statement into two parts: the first part of my 
statement addresses the broad issues surrounding the environmental affects 
of this NAFTA; and Part II presents our analysis of the very serious 
wildlife impacts of this agreement. 

PART I: Overview of the Environmental Impacts of NAFTA: 

Tlie North American Free Trade Agreement, as signed in December 
1992 by then-President Bush, was a deeply flawed document. Two months 
earlier. Bill Clinton asked, "If we don't have the power to enforce the laws 
that are on the books, what good is the agreement?" Many in the 
environmental movement, the Sierra Club among them, voiced similar 
concerns. 

Environmentalists shared something else with then-candidate Clinton: 



"When we try to pick out anything by itself, we find it hitched to everything else in the universe." 7"^ ^""^ 
Nauonal Headquaners: 730 Polk Street, San FranciKO, California 94109 (415) 776-2211 

PP'NTEP ON UNBLEACHED 100% POSTCONSUMER WASTE 



113 



a belief that economic growili and ecological health are not only 
compatible, but inextricably linked. The Sierra Club's position -- consistent 
throughout the debate over NAFTA - is that a well-constructed NAFTA 
could be good for the environment. But it must be accompanied by 
binding mechanisms to control pollution and protect natural resources. 

The Sierra Club identified four major weaknesses in the agreement 
negotiated by the Bush administration. Prior to and since the release of 
that agreement, we have worked to ensure that NAFTA: 

1) does not pose a threat to U.S. environmental laws or to 
international environmental agreements; 

2) affords adequate opportunities for citizens to defend laws that are 
challenged as trade barriers in NAFTA's dispute settlement process; 

3) provides a secure source of adequate funds to address the full scope 
of environmental problems on the U.S.-Mexico border; and 

4) does not encourage nations to relax environmental standards in 
order to compete in the global marketplace, either by adopting weak laws 
or by failing to enforce stronger ones. 

President Clinton sought to address many of our concerns about the 
Bush NAFTA. By agreeing to negotiate side agreements on labor and the 
environment, the president implicitly recognized that increased trade and 
investment with a less developed country has the potential to undermine 
environmental protection at home and abroad. 

There has been insufficient progress to correct this NAFTA's 
fundamental problems. No effort was made to lift the threat to U.S. 
environmental laws or to open up the NAITA dispute process to the 
public. The border clean up plan is under-funded and inadequate in scope. 
The North American Agreement on Environmental Cooperation, or 
NAAEC, makes only limited progress on the issue of lax enforcement of 
environmental laws. 

Our concerns remain in these four areas;* 



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1. Many U.S. environmental laws remain vulnerable to challenge from 
trading partners. Although the NAFTA contains language that would 
appear to lift the threat, loopholes throughout the Agreement restore that 
threat. What this NAFTA gives with one hand, it takes away with the 
other. 

Environmentalists' concerns about the impact of trade agreements on 
environmental laws were triggered in 1991 when a GATT panel ruled that 
U.S. trade restrictions on tuna caught in ways that killed large numbers of 
dolphins were invalid under the terms of General Agreement on Tariffs 
and Trade (GATT). 

Sierra Club and five other national environmental groups that now 
support NAFTA called for a moratorium on challenges to laws that 
regulate harvesting methods in order to protect wildlife in the "global 
commons". Despite this common call for change, the side agreement does 
nothing to guarantee the right of the U.S. government to enforce such laws 
through trade measures. 

The kinds of laws threatened by NAFTA include: 

• U.S. food safety laws and other product standards 

• State and local laws exceeding international standards 

• Laws regulating import of products produced in ways that damage 
the environment, as noted above, and 

• International Environmental Agreements enforced through import 
regulations 

In addition, this NAFTA does little to lift the threat that our trading 
partners could use lax enforcement of their laws to attract investment. 

2. The U.S. public remains shut out of the NAFTA dispute-resolution 
process if U.S. environmental laws are challenged as trade barriers. As 
even its staunchest advocates in the environmental community concede, 
"the NAFTA dispute resolution rules are still largely closed to public 
input."" Instead, panels of trade experts, with no special qualifications in 
environmental issues, would make these vitally important decisions in 
secret behind closed doors. 



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3. Key elements are missing from the plan to clean up the U.S.- 
Mexico border. Draft proposals make no provisions to clean up toxic 
waste sites, reduce air pollution, pave dusty roads, protect wildlife habitat, 
or enhance Mexico's regulatory and enforcement capacity. As a result, 
proposed funding levels fall well short of the $21 billion needed over the 
next ten, years. Moreover, most of the funding the Administration has 
proposed may never materialize. It comes in the form of "bonding 
authority", essentially permission to borrow money. However, most border 
communities are too poor to pay off such bonds. 

The NAFTA offers a unique opportunity to implement a 
comprehensive, adequately-funded border clean-up program. If this 
opportunity is squandered, the border's problems could be neglected for 
years to come. 

4. The environmental side agreement provides sanctions for countries 
that fail to enforce their environmental laws. However, the process is so 
long and complicated, even egregious violations would be hard to penalize. 
In the words of Mexico's Commerce Secretary, Jaime Serra Pucha: 'The 
time frame of the process makes it very improbable that the stage of sanctions 
could ever be reached."''' If sanctions cannot be applied readily, countries 
would have little incentive to actually improve enforcement. Polluters 
could remain free to cross borders in order to take advantage of weak 
environmental laws and indifferent enforcement. 



PART II: NAFTA'S Impact Upon U.S. Wildlife Laws AfTecting Trade 

Too little attention has been given to the question of whether 
NAFTA would have any adverse impact upon laws which the United States 
has passed to protect wildlife that is taken abroad in ways that violate 
conservation standards. These involve "production process methods" where 
the issue is not the content of the product but, in the case of wildlife, the 
way it was obtained - caught, killed, produced or harvested. Laws to reach 
such questions have been characterized as Environmental Trade Measures. 
I should also note that production process questions can also involve other 
questions of urgent or egregious conduct, such as the use of slave labor. 
But wildlife does stand out as a special case because of its defenselessness 
and vulnerability. 



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5 
I. The Impact of Environmental Trade Measures on Wildlife 

The U.S. Trade Office denies that there is a problem with regard to 
the impact NAFTA would have on Environmental Trade Measures of the 
United States that are designed to protect wildlife. U.S.T.R claims that 
NAFTA is silent on the question and that it is handled under GATT. 

However, a number of experts in wildlife law believe there is a 
problem. Language is found in NAFTA's sections dealing with Technical 
Barriers to Trade, and standards governing, them that bear on this 
question. Interpretations of GATT, which are incorporated into this 
agreement, also bear on the question. 

While the section dealing with technical barriers to trade purports to 
grant each party freedom to establish any standard (Article 904.1) and level 
of protection it chooses (Article 904.2), that freedom is qualified in the 
following ways: 

(a) the standards must be in pursuit of legitimate objectives,, 
which can include sustainable development; but, 

(b) they must avoid discrimination between goods that pose 
the same level of risk (Article 907.2(c). This latter 
qualification would seem to preclude differentiating 
treatment of goods based on their production methods since 
they would pose the same risk in use under the same 
conditions. 

Moreover, the definition of standards seems to limit the scope of 
permissible standard-setting to the "characteristics" of goods, or "their 
related processes or production methods" (Article 915.1). A related 
production process might, for instance, refer to the way beer or wine is 
made; such a production process would be related to its quality. 
Production processes that are unrelated to the nature of the product seem 
to be beyond the pale. Thus, regulating the means of taking tuna or 
shrimp so as to minimize adverse consequences on non-target species 
would have nothing to do with the characteristics of the tuna or shrimp, 
nor is this related to the quality of the product. It falls outside the 
definition of acceptable means of regulation. 



117 



This reasoning seems to limit "legitimate objectives" so as to exclude 
two of the primary motivations behind U.S. wildlife import laws: the lack of 
a conservation regime governing the taking process, or failures in enforcing 
it. Furthermore, Article 903 provides that the parties re-affirm their 
obligations under GATT. The Tokyo round of GATT specifically provides 
that production process methods are "presumptively" barriers to trade. 
GATT jurisprudence also has interpreted Article XX to disallow 
regulations based on production-process methods. 



2. A Growing List of Wildlife Laws Would Run Afoul of Trade Restrictions 

There is a growing list of wildlife laws that would run afoul of 
NAFTA, as well as GATT rules. The restrictions are designed to control 
the importation of wildlife, and products made from wildlife, that are 
obtained from the wild in ways that fail to meet various conservation 
standards. 

They include: 

(1) The Lacey Act (16 U.S.C. sec. 3372); prohibits 
importation of wildlife taken in violation of 
conservation laws; 

(2) Pelly Amendment to the Fishermen's Protective 
Act of 1967 (22 U.S.C. sec. 1978); allows restrictions 
on the import of fish products from nations found to 
be violating international fishery conservation 
programs (e.g., the International Whaling Commission); 
the Packwood Amendment to the Fishery Conservation and 
Management Act (16 U.S.C. sec. 1801-1882) imposes a 
mandatory reduction in access to U.S. fisheries for 
egregious acts of non-compliance with IWC determinations; 



(3) The Marine Mammal Protection Act (16 U.S.C. sec. 
371(a)(2)(Supp. V 1981) prohibits import of tuna taken 
in violation of effective agreements to protect dolphins 
(deals with incidental take); 



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(4) International Dolphin Conservation Act of J992 
(106 Stat. 3425) encourages the establishment of a 
multilateral agreement regarding the practice of 
setting on dolphins; 

(5) The Driftnet Impact Monitoring, Assessment, and 
Control Act of 1987 (16 U.S.C. sec. 1822), 

The Driftnet Act Amendments of 1990 (16 U.S.C. 
sec. 1826(f), and High Seas Driftnet Enforcement Act 
of 1992 (P.L.102-440); trade sanctions imposed on 
nations that violate U.N. driftnet moratorium; 

(6) The Departments of Commerce, Justice, State, 
the Judiciary, and Related Agencies Appropriations 
Act (P.L. 101-162, sec. 609; 103 Stat. 988, 1027 
(1989); prohibits import of shrimp taken through 
techniques which adversely affect endangered sea 
turtles; requires the use of "turtle excluder 
devices" (TED's) to be imported; 

(7) African Elephant Conservation Act (16 U.S.C. 
sec. 4221); restricts import of African elephant 
ivory; 

(8) Wild Bird Conservation Act of 1992; 16 U.S.C 
4901); bans import of birds taken from the wild in 
tropical countries. 



3. Wildlife Protection Laws Are Not a Recent Phenomenon 

The Congress has legislated more than two dozen times, dating back 
to 1901, to protect wildlife. This law-making activity is not the result of 
some fluke; it reflects a conscious and deliberate effort to find effective 
ways to deal with the particular problems involving trade in wildlife. 

This activity began in 1906, expanded in scope in the 1930's and has 
continued at an active pace since 1967.'* It reflects recognition of the fact 
that the U.S., as a major market, shares in the responsibility for the fate of 



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8 

wildlife for which it creates the demand. It is a principle of 
environmentalism that the consumer must act responsibly in creating 
market demand. Sometimes market demand overwhelms the capacity of 
developing countries to implement conservation programs. 

Congress passed three of these laws after GAl Is Tuna/Dolphin 
decision, which found the U.S. practice in violation of GATT. By a margin 
of 362-0, the House of Representatives voted to ask the President to re- 
negotiate GATT to put an end to such problems. Congress understood the 
context in which it was legislating. 

Through the years, the Congress has been protecting more and more 
types of wildlife: whales, marine mammals, then dolphins in particular, 
turtles, elephants, endangered species, endangered populations, and 
tropical birds in general. It has also broadened the scope for trade 
restrictions from barring import of the particular specimens, whose taking 
violated conservation standards, to other related species, and even to 
embargo any product from countries that diminish the effectiveness of an 
international program for endangered species or fisheries conservation. 
Moreover, sanctions can even be imposed for excessive takings of wildlife 
that do not even enter international trade.^ 

The Executive branch has also been consistently involved in the last 
two decades in implementing these laws actively. For instance, the Pelly 
Act's certification process has been invoked about twenty times because of 
failures to comply with IWC determinations. Most recently, on August 6, 
1993, the Secretary of Commerce certified Norway for resuming commercial 
whaling in defiance of the ban on commercial whaling imposed by the 
International Whaling Commission. 

The U.S. is not alone in enacting such laws. The European 
Community bans imports of fur from any nation that allows the use of the 
leg-hold trap. And New Zealand prohibits bringing fish into the country 
taken using a driftnet. 

The United States Congress should insist that its freedom of action to 
continue this program of legislating not be jeopardized by NAFTA. While 
the provisions creating this jeopardy in GATT and NAFTA are similar, 
NAFTA decisions are not subject to the final approval of an overall council 



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as in GATT. Thus, there is no appeal from the decision of a NAFTA 
panel. 



4. U.S. Wildlife Protection Laws May Be Violations of GATT 

Opinion is split on whether U.S. wildlife protection laws violate 
GATT. Article XX of GATT includes a provision (par. (b)) allowing 
measures "necessary to protect human, animal or plant life or health," and 
a provision (par.(g)) allowing measures "relating to the conservation of 
exhaustible natural resources." Both would provide a basis for such U.S. 
laws. But the Tuna/Dolphin panel asserted that extrajurisdictional laws 
are beyond the scope of Article XX. However, paragraph (e) of that 
Article, dealing with prison labor, clearly is extrajurisdictional in scope, as 
is paragraph (d) relating to intellectual property. 

However, Articles I and XI of GATT would bar such trade 
restrictions, unless they are protected under Article XX. Article XX 
requires that national laws not discriminate unjustifiably. The unanswered 
question is what is the basis for determining whether discrimination based 
on poor conservation practices abroad is justifiable? 

Since the key logic behind GATT is that there be no discrimination 
between like products, nations should be allowed to treat domestic and 
imported products alike that suffer from the same problems in terms of 
production process methods. 

However, recent GATT jurisprudence seems to be on a collision 
course with environmental philosophy for responsible consumers. Until the 
U.S. can get GATT to clarify its rules, we should not surrender our 
commitment to using environmental trade measures to protect wildlife. 
We should make sure that NAFTA does not force such a surrender. It 
should also be remembered that GATT has done much to narrow the 
protections of Article XX at the behest of Mexico and Canada in cases that 
they have brought. We believe that NAFTA gives Mexico a very powerful 
club to force the U.S. to change its law. 

5. Multilateral Agreements Cannot Be Counted Upon to Accomplish VS. 



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10 
Wildlire Protection Objectives 

We believe that it is not possible for multilateral agreements, except in 
rare circumstances, to accomplish U.S. wildlife protection objectives. 
GATT jurisprudence recently has argued against unilateral and 
extrajurisdictional action. However, scholars report that there is "nothing 
in the drafting history of Article XX(b) to support the view that a party 
must first seek voluntary agreements'* 

Moreover, multilateral agreements in the conservation field usually 
only come to fruition after problems have become acute and after a long 
lag time as worldwide awareness and pressure grows. The plight of species 
and populations may become too serious if nothing is done in this field 
until general agreement is reached. Some countries have to be the leaders 
in developing the political will to catalyze action where wasting assets will 
not await ultimate world agreements. In addition, too often such 
agreements are unduly weak and ineffective as a result of having to find 
common ground among so many disparate interests. That "common 
ground" usually turns out to be the lowest coimnon denominator. 

Further, few such multilateral agreements have any built-in 
enforcement mechanisms. They must find their enforcement through the 
cooperation of nations such as the United States where market closure 
constitutes an effective sanction. This sanction usually works. 
Notwithstanding some 20 certifications under the Pelly Amendment, no 
President has had to impose final sanctions because wayward countries 
have usually then gotten in line. 

Finally, it must be noted that most of our environmental trade 
measures in the wildlife field are not exercises in unilateral power. 

-Some of the oldest, such as the Lacey Act, help reinforce the 
conservation laws of the countries of origin; 

--others help enforce the edicts of multilateral agreements, such 
as those coming from the Convention on International Trade in 
Endangered Species, which is put into force by our Endangered 
Species Act, and the International Whaling Convention, which is 
enforced by our Pelly and Packwood amendments; CITES is also 



122 



11 

being enforced through U.S. efforts to protect endangered turtles 
through restrictions on methods of taking shrimp and through 
restrictions on taking wild birds from the tropics; 

—other U.S. laws provide implementation for resolutions of the 
United Nations General Assembly, as in the case of driftnet 
fishing sanctions; and, 

-other laws respond to requests by affected countries which find 
themselves unable to enforce their own wildlife laws against 
massive poaching, such as in the case of elephant ivory where 
requests for help were received from East African nations. 

Admittedly, there are cases where the U.S. has acted unilaterally, but 
that usually is under circumstances where the countries of origin have 
failed to control situations in any way. This was the case with respect to 
catastrophic incidental mortality of dolphins in tuna fishing. U.S. action 
has been taken in cases of default, rather than in opposition to domestic 
laws. Moreover, in these cases the U.S. has sought new multilateral 
agreements to deal with the problems, such as the International Dolphin 
Conservation Act adopted last fall. Even when such agreements were 
obtained, it should be noted that not all of the problem countries adhere to 
those agreements. For example, Mexico promised to sign an agreement to 
protect dolphins but never did. 

In conclusion, all of what the U.S. has done is selfless in nature and 
has been done to protect wildlife resources. It has no protectionist aims. 
All of it is justifiable either because of the urgency involved in dealing with 
perishable resources, where irreversible consequences are possible, or 
because it is in pursuit of international cooperation. This body of 
important legislation should not be jeopardized by NAFTA. 



6. The Conflict Between NAFTA and U.S. Wildlife Laws is Unacceptable 

Some may argue that the United States government should just 
live with the possibility of conflict between provisions in NAFTA 
and the operations of our wildlife laws that rely on environmental trade 
measures. They point out that NAFTA is not self-executing and that 



123 

12 
NAFTA panels cannot invalidate our statutes. 

However, there are consequences of accepting such inconsistencies. 
At the outset, it should be noted that the State Department in the past has 
proposed changes in U.S. statutes where they are in conflict with trade law. 
This happened in the case of the tuna/dolphin dispute. Moreover, the U.S. 
Trade Office claims that they were obliged to appeal the federal court 
decision regarding the Marine Mammal Protection Act as a consequence of 
the GATT panel ruling. 

We can expect that the Congress will be urged by the Executive 
Branch to conform our domestic laws to international obligations. 
Moreover, the closed nature of the NAFTA dispute resolution process 
deprives the Congress and our public of any knowledge about whether the 
Justice Department is capably defending our statutes. 

Furthermore, if the U.S. persists with violations of NAFTA panel 
decisions, the U.S. would be subject to trade sanctions, which would apply 
pressure to change our wildlife laws. How high a price will we be willing 
to pay to maintain these laws in order to compensate Canada or Mexico 
for our protection of the environment in ways that may affect their export 
possibilities? Clearly, putting our wildlife laws in such jeopardy will arouse 
hostility among the American public toward trade agreements which 
needlessly risk programs that they care deeply about. 

Moreover, cynicism is engendered about our intent to abide by trade 
agreements if this country enters into them without any real intention of 
conforming to certain provisions, as those affecting our wildlife laws. Our 
nation would be in violation of Article 27 of the Vienna Convention on the 
Law of Treaties that specifies that "a party may not invoke the provisions 
of its internal law as justification for its failure to perform under a treaty." 
Furthermore, Article 31 of that convention provides that parties shall abide 
by their treaty obligations in "good faith." The U.S. cannot just ignore its 
obligations. 

Finally, this whole issue reveals a fundamental conflict in aims, 
philosophy and approach between trade specialists and environmentalists. 
Ignoring these problems will not make them go. away. This conflict needs 
to be addressed forthrightly and satisfactorily. Trade specialists should not 



124 



13 
try to set the rules of the game for bona fide environmental measures. 

Our review of wildlife programs and practice reveals that these efforts 
preceded GATT in their origin and are part of a well developed system for 
addressing conservation problems. Our right to protect wildlife should be 
protected in NAFTA, not jeopardized by the incorporation of wayward 
GATT rules.' 

Conclusion 

The Sierra Club believes that this NAFTA must be defeated and 
renegotiated to stem the rising threat to environmental protection posed by 
this and other international trade agreements. NAFTA builds on existing 
international trade rules that have attacked legitimate environmental 
protections as barriers to trade. 

As one leading environmental economist has observed, and as Sierra 
Club's analysis documents: "[T]rade officials have attempted to shift 
international rules of the game to protect the goals of free trade against 
those of environmental protection. Understandably, these shifts have 
provoked environmental groups to intense opposition."* 

A recent news story confirms the point. Even before the ink was dry 
on the side agreements, the Clinton Administration began considering new 
regulations to screen environmental regulations for their effects on trade.' 
At the same time, the Administration has actively opposed reciprocal 
efforts to evaluate trade agreements for their effects on the environment. 
If one is legitimate, clearly the other is too. 

We view such shifts in the rules of the trading game as economically 
and environmentally unnecessary and counterproductive. Environmental 
protection is a necessary condition for trade that benefits everyone. Unless 
good environmental laws are adequately enforced, the economic gains 
expected from trade can be dissipated through destruction of natural 
resources and contamination of the environment. 

In short, the free-trade pact offered by the current administration 
remains fatally flawed. The Sierra Club's opposition to this NAFTA, 
adopted unanimously by its Board of Directors, is the result of a 



125 



14 

painstaking examination of tiie text of both the original document and the 
environmental side agreement. 

The Sierra Club's position, unchanged for the past two years, is that 
liberalized trade must not come at the expense of a healthy global 
environment. Despite assurances to the contrary, the environmental side 
agreement fails to provide definitive answers to the grave questions raised 
by the Bush NAFTA. 

In the final analysis, it is the precise language of this NAFTA, and the 
environmental .side agreement -- not the vague promises of its supporters - 
- that will determine whether we trade away our environmental future. It 
is on the basis of that language that we must oppose this NAFTA, and 
work for a better one. 

Notes: 

1. Exccrplcd from Ihc Excculive Summary of the Sierra Club Analysis of the North American Free Trade 
Agreement and the North American Agreement on Environmental Cooperation . 

2. "Selling the Record Straight on Environmental Concerns about NAFTA." National Wildlife Federation 
Fact Sheet, Septeml>cr 14, 1993. 

3. Journal of Commerce . August 20, 1993. 

4. The Tariff Act of 19.^0 barred import of birds and mammals taken in violation of the 
laws of the country of origin. Tlie Lacey Act was amended in 1935 to apply its provisions 
to foreign countries as well as states. In 1949, the Lacey Act was further amended to bar 
import of wild animals or birds under conditions known to be "inhumane or unhealthful." 

5. Sec amcndmenls lo the Pclly Act in the High Seas Orittnct Fisheries finforccment Act and the 1978 amendments to the Pcliy Act. 

6. Steve Charnovitz, Environmentalism Confronts (lATr Rules . 27 Journal of World Trade 38. 

7. Many of ihe points made in this paper arc derived from analyses by Steve Charnovitz and arc developed in 
his two papers: Environmenlalisin Confronts OATT Rules-Recent Developments and New Opportunities . 27 
Journal of World Trade 37 (April 1993), and NAFTA: An Analysis of ils Environmental Provisions . 23 ELR 
l(XXX.7 (February 1993). 

8. Robert Repctlo, "Trade and Environment Policies: Achieving Complementarities and Avoiding Conflicts", 
The World Resources Institute, Washington, D.C., July 1993. 



126 



15 



9. 'Administration Plans Trade Impact Studies for Environmental Policy." Inside E.PA. Weekly Report . 
September 24, 1993. 



127 




NAFTA AND THE OPPORTUNITY 
TO ADVANCE SUSTAINABLE TRADING PRACTICES 

TESTIMONY OF RODGER SCHLICKEISEN 
PRESIDENT, DEFENDERS OF WILDLIFE 



BEFORE THE HOUSE COMMITTEE ON MERCHANT MARINE AND FISHERIES 
NOVEMBER 10, 1993 



1244 Nineieenth Street, NW ♦ Washington, DC 20036 • 202-659-9510 FAX; 202-833-3349 



128 



TABLE OF CONTENTS 



INTRODUCTION 



II. THE SPECIAL PROBLEM OF PPMs ~ ARE U.S. LAWS 
AT RISK? 



III. THE SIGNIFICANCE OF NAFTA "S ENVIRONMENTAL 
SUPPLEMENT 



IV. NAFTA IS NOT ADEQUATELY FUNDED 5 

V. THE PUBLIC'S ROLE IN IMPLEMENTING NAFTA AND THE 
IMPORTANCE OF NEPA FOR FUTURE TRADE AGREEMENTS 7 

VI. CONCLUSION 10 



129 



I . INTRODUCTION 

Mr. Chaizman, on behalf our members nationwide, I appreciate 
the opportunity to testify before this Committee today about the 
North American Free Trade Agreement (NAFTA) . With only a week to 
go before the scheduled House vote on this historic but 
controversial agreement, I am pleased to be ztble to share 
Defenders of Wildlife's (Defenders) thoughts on the environmental 
implications of NAFTA implementation. 

As we have said many times over the past year. Defenders 
believes that NAFTA — this NAFTA — represents an unprecedented 
opportunity to provide important benefits to both North America's 
economy and its environment. As we explained in December 1992: 

Defenders shares the concerns of critics who believe 
the current NAFTA draft provides inadequate assurances 
that the pact would not make Mexico a haven for 
American industries eager to escape the United States' 
strict environmental regulations. However, expanded 
free trade has the potential to break the chains of 
poverty of millions of people while providing enormous 
new resources for investment in environmental cleanup 
and conservation. 

It is because we have viewed NAFTA as an opportunity that we 
signed a letter on May 4 of this year, with six other 
environmental groups, offering to support the trade pact if 
certain environmental and conservation conditions were satisfied 
by the final agreement and related provisions. Since May 4, we 
have worked diligently with the administration to make the 
environmental supplemental agreement, the U.S. /Mexico border 
infrastructure plan, and the Congressional implementation package 
as good and as green as possible. 

In our effort to make NAFTA environmentally sound, we have 
respected and listened to other groups' opinions on the trade 
pact (because reasonable people really can disagree about NAFTA) , 
but have ultimately kept our own counsel despite political 
pressure from both sides of the debate. We remain one of the few 
environmental groups uncommitted on the pact. We remain 
uncommitted because of the absence of key environmental 
protections, which we believe can be provided by both the U.S. 
and Mexican governments before the House vote on November 17. 



130 



II. THE SPECIAL PROBLEM OF "PPMs" — ARE U.S. LAWS AT RISK? 

Given the progress that has been made in NAFTA and its 
environmental supplemental agreement, Defenders' evaluation of 
NAFTA now hinges primarily on a single but vitally important 
issue. This issue — "production and process methods" (PPMs) 
is important because it cuts to the very heart of the entire 
trade and environment debate. This is not an issue only about 
dolphins. Or sea turtles. Or sustainable timber harvesting. 
From clean air regulation to waste reduction, PPMs embody the 
great majority of environmental and conservation law. 

The problem is that international trade law, as represented 
by GATT jurisprudence and the NAFTA text, does not recognize 
import restrictions based on how a product is produced. The most 
notorious (and well discussed) example of the problem is a 1991 
GATT arbitral panel decision, which decided that the U.S., under 
the Marine Mammal Protection Act (MMPA) , could not restrict the 
import of Mexican tuna based on unacceptably high rates of 
dolphin mortality caused by the Mexican tuna fleet. In reaching 
this decision, the GATT panel reasoned that unless the imported 
tuna itself directly causes harm to the U.S. or its nationals, 
the U.S. cannot legally restrict its import under GATT. Whether 
thousands of dolphins are killed — or whether any other serious 
environmental damage is done — in the process of harvesting the 
tuna is "trade irrelevant." From an environmental perspective, 
the ramifications of this decision are nothing less than 
disastrous. 

Given the fact that Mexico instigated the tuna/dolphin 
conflict, we believe that NAFTA is the ideal vehicle to make real 
progress on PPMs. If the U.S. cannot get real movement on PPMs 
in the NAFTA forum, where Mexico is highly desirous of an 
agreement, we are politically naive to believe that we can make 
progress in any round of the GATT. Although the ability of the 
NAFTA Commission on Environmental Cooperation (CEC) to "consider 
and develop recommendations" about "life-cycles" is welcomed, it 
is not insufficient and meaningless without binding commitments 
on the issue. We must gain inclusion in the NAFTA package, 
perhaps in an U.S. executive order and Mexican side letter, of 
the common sense principle that non-discriminatory trade 
restrictions are acceptable mechanisms to protect the world's 
remaining living natural resources. 

This principle is not at all controversial to Congress. In 
October 1991, 64 senators — with bipartisan leadership — wrote 
the President demanding that trade agreements recognize the 
legitimate objectives of protecting the environment and 
conserving natural resources. In August 1992, by a vote of 362- 
the House of Representatives passed the Waxman/Gephardt 
Resolution 246 stating that the House would not pass any trade 
agreement that jeopardizes wildlife protection laws. And even 



131 



GATT — before the controversial tuna/dolphin decision — 
recognized the importance of protecting the environment and 
natural resources in Article XX (b) and (g) . 

However, the NAFTA text essentially endorses Mexico's 
tuna/dolphin GATT complaint. While Article 904 of NAFTA protects 
environmental laws with a "legitimate objective," Articles 907 
and 915 both work to exclude PPM-based laws from the "legitimate 
objective" rubric. Furthermore, Article 2005 specifically 
permits Mexico and Canada to bring a GATT challenge if a U.S. 
environmental law seeks to protect a resource outside the U.S. 
territorial jurisdiction. This situation means that provisions 
of many U.S. and state conservation laws could be successfully 
challenged under NAFTA, thus forcing the U.S. to effectively pay 
for legitimate laws protecting international resources through 
trade sanctions. Such federal laws include the: 

* Marine Mammal Protection Act 

* Endangered Species Act 

* Wild Bird Conservation Act 

* High Seas Driftnet Enforcement Act 

* Pelly Amendment 

* Lacey Act 

* Sea turtle measures in the 1989 Commerce 
Appropriations Act 

* Packwood Amendment to the Magnuson Fishery Conservation 
and Management Act 

* Atlantic Tunas Convention Act 

What's more, in Chile — considered by many to be next in line 
for NAFTA — the fishing industry is intentionally slaughtering 
numerous types of marine mammals for crab bait. Consequently, 
Defenders and the U.S. crab industry presently have a petition 
pending before NMFS and Treasury to halt imports of Chilean crab 
under Section 101(a)(2) of the MMPA. But any effort by the U.S. 
to force a halt to this objectionable practice, or other equally 
offensive harvesting techniques, would run afoul of the present 
NAFTA package's treatment of PPMs. 

We believe one of the key remaining environmental questions 
regarding NAFTA is: How can the U.S. Congress, and particularly 
this committee given its jurisdictional interest, vote for an 
agreement with the country that formally initiated the PPM/trade 
dispute against the U.S. in the first place — without any 
substantive progress on the important issue of PPMs? Our 
solution would be for the U.S. and Mexico to agree to a 
moratorium on PPM challenges in NAFTA and GATT relating to living 
natural resources until sufficient criteria for judging these 
laws are established either in the NAFTA CEC or the GATT. This 
way, NAFTA could go forward, but important U.S. laws would not be 
subject to challenge by Mexico until PPM negotiations occurred. 
This solution would not necessitate any renegotiation of the 



132 



pact. 

III. THE SIGNIFICANCE OF NAFTA 'S ENVIRONMENTAL SUPPLEMENT 

Mr. Chairman, we would now liKe to comment upon the other 
environmental aspects of NAFTA — that is, if we were to assume 
the key issue of PPMs was not a problem. 

When then-candidate Clinton announced his support for NAFTA, 
contingent upon the successful negotiation of several 
supplemental agreements, these agreements immediately became the 
focal point of NAFTA politics. Most opponents of President 
Bush's NAFTA sought to rectify all of their complaints of the 
agreement with the proposed supplementals, while many supporters 
shuddered at the prospect of reopening NAFTA negotiations to 
ensure certain social safeguards relating to environmental 
protection and labor rights. 

As it turned out. President Clinton did not seek to reopen 
any provision of NAFTA with the supplemental negotiations. 
Instead, at least in the case of the environmental supplement, he 
chose to concentrate on two main objectives: (1) effective 
enforcement of each Party's domestic environmental laws, and (2) 
increased environmental cooperation among all three NAFTA 
parties. To achieve these objectives, the administration 
proposed (as had others before it) to create a North American 
Commission on the Environment, now known as the CEC. 

Obviously, Defenders' environmental supplement agenda was 
considerably larger than President Clinton's. And, there are a 
number of issues — in addition to PPMs — that we think could 
have been significantly improved. Nonetheless, we do not claim 
that the environmental supplement is a failure. 

To the contrary, the environmental supplement is a 
groundbreaking agreement in the larger effort to integrate the 
heretofore disparate disciplines of trade and the environment. 
The agreement also fulfills two main objectives sought by the 
administration. First, more than any other existing legal 
mechanism, the environmental supplement helps ensure that each 
NAFTA party enforces its own environmental laws. Not only can 
the CEC receive public petitions, investigate problems, write 
action plans, and levy sanctions regarding lax domestic 
environmental enforcement, but the supplement also requires each 
Party to ensure that administrative and legal remedies are 
available to private individuals. 

Second, the supplement authorizes the CEC and its 
independent Secretariat to study and report upon virtually any 
environmental issue in North America. Although some may 
disparage this cooperative mandate. Defenders believes that CEC 
workplans could well become the basis for significant new 



133 



insights into the relationship between international trade and 
the environment, and provide an excellent forum to monitor the 
environmental impacts of NAFTA. For example, the CEC could 
study the effects of NAFTA on potential agricultural displacement 
and its connection to both multiple conservation issues and 
commodity cost-internalization. 

Nonetheless, the environmental supplement is not perfect. 
For example, the path leading to sanctions for failure to enforce 
domestic environmental laws is relatively long and convoluted. 
Our opinion, however, is that the supplement's enforcement 
process does keep a Party's "feet to the fire" in the case of lax 
environmental enforcement. We must remember that the whole point 
of trade sanctions is not to use them, but to compel certain 
behavior. No one would be happy if Mexico was paying millions of 
dollars in trade sanctions as it simultaneously continued to hairm 
the environment's air, water, and land. As long as sanctions can 
be used, and an offending Party believes they will be used, the 
supplement's sanctions process should help ensure that 
environmental laws are properly enforced. 

IV. NAFTA IS NOT ADEQUATELY FUNDED 

Often overlooked in the NAFTA debate is the money necessary 
to implement it properly. Generally, funding needs fall into one 
of four categories: 

(1) Cleaning up past pollution along the U.S. /Mexico 
border, which has resulted in abandoned hazardous waste, solid 
waste, dirty air, sullied water, and degraded habitat; 

(2) Satisfying future infrastructure and health demands 
along the U.S. /Mexico border that will be caused by the increased 
development and traffic in the border area; 

(3) Establishing two commissions on labor and the 
environment; and 

(4) Compensating for tariff revenues lost as a result of 
NAFTA. 

As one might expect, there is not unanimity as to exactly 
how much funding is necessary to address successful NAFTA 
implementation. The Sierra Club, for instance, has calculated 
that $14-21 billion is needed over the next decade in order to 
clean up existing pollution, provide for future infrastructure 
demands, and ensure adequate enforcement and administrative 
support. The National Wildlife Federation and the Environmental 
Defense Fund estimate that $7.6 billion is necessary between 1993 
and 2004 for basic infrastructure needs like sewage treatment 
plants, safe drinking water supplies, and solid waste disposal. 



134 



The Clinton administration has determined that the U.S. and 
Mexico need to generate approximately $8 billion over the next 
decade to deal with environmental problems along the U.S. /Mexican 
border. This money will go primarily to the government of 
Mexico, as well as to a newly created Border Environment 
Cooperation Commission (BECC) that will assist local communities 
in developing and implementing environmental infrastructure 
projects primarily along the border. A North American 
Development Bank (NADBank) , capitalized equally by the U.S. and 
Mexico, will provide $2-3 billion in new financing for BECC- 
approved projects, while the World Bank, the Inter-American 
Development Bank, and the Mexican government will provide the 
remainder. 

Defenders believes that the Administration has taken an 
admirable step toward helping a region overwhelmed by past 
unchecked maquiladoras development. Particularly noteworthy is 
the organizational structure of the BECC, which will rely on 
local governments, an accountable Advisory Council, and public 
participatory mechanisms in developing infrastructure projects. 
The BECC will also rightly rely on both the polluter pays 
principle and user fees to service the debt incurred by NADBank 
financing. 

Yet, three big questions remain. First, can we ensure that 
the administration's $8 billion infrastructure price tag can be 
met with a secure source of real money? Second, when will 
existing pollution, particularly the many hazardous waste sites, 
be cleaned up and how do we plan to pay for it? To date, the 
1992 Integrated Border Environmental Plan, the 1983 La Paz 
Agreement, and the International Boundary and Water Commission 
(IBWC) have all been unable to adequately deal with a border 
region that the American Medical Association has labelled a 
"cesspool." What is immediately needed is a hazardous waste 
tracking system, as well as a Mexican community right-to-know 
law, that ensures effective enforcement against companies not 
properly disposing of hazardous materials and waste. 

Third, and perhaps most important from Defenders' and this 
Committee's perspective, will adequate funding be made available 
for wildlife habitat conservation? At present, the answer to 
this question for the U.S. side of the border is a resounding 
"no." For FY 94, a mere $100,000 was appropriated for Department 
of the Interior activities and projects related to NAFTA. 
Luckily for Mexico, the picture is brighter, thanks to a probable 
$30 million grant by the U.S. Agency for International 
Development, and by several multilateral development bank loans 
and debt-for-nature swaps. This assistance is especially welcome 
given that Mexico is a rich fount of biodiversity, home to more 
plant and animal species than all but three other countries in 
the world. In fact, 15% of its species are found nowhere else on 
earth . 



135 



The lack of funding on the U.S. side of the border, however, 
is disturbing to conservationists and Interior officials alike. 
For instance, it is already very difficult for the FWS to enforce 
existing restrictions on wildlife traffic under the Endangered 
Species Act and CITES. Although Mexico became a party to CITES 
in 1991, much illegal trade in wildlife and wildlife parts is 
feared to still emanate from Mexico. Under NAFTA, because the 
Customs Service would no longer possess the financial incentive 
to check shipments crossing the border as a result of declining 
tariffs, illegal wildlife traffic could grow significantly more 
severe — particularly as overall traffic increases with NAFTA. 

A paucity of U.S. conservation funding along the Mexican 
border could also lead to unmitigated impacts to wildlife 
habitat. Surface and subsurface water resources will be 
stressed. Habitat corridors will be destroyed and fragmented. 
Considering that eight U.S. national wildlife refuges and nearly 
500 endangered, threatened, and candidate species of plants and 
animals are within 25 miles of the border, increased trade 
traffic is not an idle threat. Already, more than 20 bridges 
along the Rio Grande have been proposed to link the U.S. and 
Mexico. A shortage of U.S. conservation funding will also 
preclude or cripple suggested joint U.S. /Mexico conservation 
projects. To address this problem, we propose a supplemental 
appropriation or a reprogramming request by Interior. 

Finally, despite our overall satisfaction with the creation 
of the CEC, we are skeptical that an annual authorization from 
the U.S. of $5 million is sufficient. Assuming Mexico and Canada 
contribute equal amounts, $15 million will pale in comparison to 
the $30-70 million recommended by the NWF/EDF study and the $240 
million recommended by the Sierra Club. It is also discouraging 
to note that the Center for the Study of Western Hemispheric 
Trade, to be located in Texas, is authorized $10 million 
annually. 

V. THE PUBLIC'S ROLE IN IMPLEMENTING NAFTA AND THE IMPORTANCE 
OF NEPA FOR FUTURE TRADE AGREEMENTS 

If we have learned anything from the rancor surrounding 
NAFTA, it is that the public must be involved in both the 
negotiation and implementation of major trade agreements. 
It is obvious that a large share of the public either does not 
understand or trust the contents of NAFTA. Because Defenders, in 
general, believes there are economic and environmental merits to 
liberalized trade, we strongly believe that the Congress and 
President must immediately make strides toward actively including 
the public in the trade agreement process. 

In the NAFTA statement of administrative action (AA) , which 
accompanied the implementing bill, the administration is to be 



136 



commended for extending "USTR's current practice of providing for 
public notice and opportunity for comment to NAFTA dispute 
proceedings" under Chapter 20. The AA adds that "this would 
include publishing public notice of the dispute in the Federal 
Register, giving briefings for and accepting input on the 
dispute's facts and arguments from interested individuals and 
groups, and making U.S. panel submissions publicly available." 
We would like to see this practice become law. 

In addition, because the Chapter 20 dispute resolution 
process is not open to the public, and possesses the ability to 
pass judgement on U.S. democratically established laws, we would 
like to see the U.S. agree to a set number of roster panelists 
with significant environmental experience and, in any particular 
case concerning environmental or conservation laws, with at least 
two (out of five) arbitral panelists having significant 
environmental or conservation experience. These additional legal 
requirements could all be presently included in a NAFTA executive 
order, and perhaps later put into the Trade Act itself. 

Public participation should not be limited to NAFTA Chapter 
20 dispute resolution alone. The public should also be included 
in the Chapter 7 and 9 standards committees by the U.S., as well 
as in the Article 1114 investment consultations. 

In addition, the public must be given a substantial role by 
the Clinton Administration in all aspects of the environmental 
supplement, particularly enforcement actions brought under the 
CEC — including a commitment by the U.S. to vote in favor of 
public dissemination of any information, document, report, 
decision, or record (unless confidential business or governmental 
information is at issue) . There should also be a commitment to 
select enforcement panelists with significant environmental 
expertise. Such commitments should be accompanied by explicit 
U.S. efforts to create an open and accountable CEC Advisory 
Committee, as provided in the supplemental agreement. Strong 
U.S. representation on the CEC Advisory Committee would nicely 
complement the formation of a Trade and Environment Policy 
Committee under the Trade Act, as well as additional 
representation on other working trade committees. Furthermore, 
the U.S. should convene a blue ribbon panel to advise the 
administration on the NAFTA Chapter 20 and CEC Model Rules of 
Procedures. Again, these public participation mechanisms could 
and should be included in a NAFTA environmental executive order. 

Yet, while the public's involvement in the implementation of 
NAFTA is absolutely vital, this is only half the picture. The 
U.S. Bust allow its citisenry to participat* acre aeaningfully in 
th« oonsidaration of all future trade agreenents, preferably 
through application of the National Environnental Policy Act 
(MEPA) . Although Judge Richey's district court decision was 
overturned by the federal Court of Appeals for the D.C. Circuit 

8 



137 



in August, we wholeheartedly agreed with the decision that NEPA 
is applicable to USTR's actions in negotiating and preparing 
international major trade agreements. 

Instead of rearguing this legal debate, however, we would 
like to note that NEPA can be made to work for trade agreements. 
Ideally, USTR would propose rules in the Federal Register, with 
opportunity for public comment and hearings, that lay out the 
agency's NEPA obligations with regard to trade agreements. The 
State Department, for example, long ago promulgated such rules 
for its treaty making actions. As long as the fundamental 
requirements of the statute are met, NEPA "shall in no way affect 
the specific statutory obligations of any Federal agency" and its 
provisions "are supplementary to those set forth in existing 
authorizations of Federal agencies." When analyzed in this 
light, there might be no need for Congress to amend NEPA to 
explicitly address trade agreements, as some have suggested. 

If NEPA were amended (for example, to specifically define a 
"final" agency action by USTR in negotiating trade agreements 
like GATT) , it could easily be done in a way that does not 
impinge upon the President's Constitutional Article II powers or 
interfere with the "fast-track" process. Even under this 
scenario, a USTR rule-making process could flesh out a more 
deliberate and holistic approach to assessing the environmental 
impacts of trade agreements, such as: 

* At the beginning of trade negotiations, USTR could 
scope all the relevant environmental issues that the U.S. would 
hope to cover in the proposed agreement, with opportunity for the 
public to comment. 

* As the trade agreement approached conclusion, USTR 
could prepare a draft EIS that reflected the actual contents of 
the proposed agreement. 

* Prior to the end of negotiations, USTR could release 
the draft EIS to the public for comment. If under fast-track 
authority, a draft EIS could even be released as late as when the 
President notifies Congress of his intention to enter into an 
international trade agreement. 

* If under a fast-track timetable, USTR would have at 
least 90 days to respond to comments and prepare a final EIS. As 
an alternative, USTR could prepare a final EIS at the time it 
submitted its implementing legislation to Congress, or shortly 
thereafter, which would satisfy any potential LEIS requirement. 

* If necessary, classified information or trade secrets could 
be excluded from EISs based on the present Freedom of Information 
Act (FOIA) exemptions. 



138 



Obviously, this is just a suggested framework. USTR, as the 
responsible agency, should propose rules on NEPA's application to 
international trade agreements. Hopefully, as our framework 
shows, NEPA is not a big bad monster that will derail interna- 
tional trade agreements. Th« recently released HXFTA Report on 
Environaental Issues by the Clinton administration demonstrates 
that sound environmental analyses of trade agreements are 
possible. The administration deserves much praise for this 
highly useful document. We vigorously maintain that NEPA can 
help make trade agreements environmentally and economically 
sound . 



VI . CONCLUSION 

Will the environment be better off with or without NAFTA? 
This is the question that should be asked. And for the answer, 
one should look not only to the problem of the polluted 
U.S. /Mexico border and to the enforcement of Mexico's 
environmental laws, but also to the implications of NAFTA for 
international trade and environment policy. 

With regard to pollution and environmental enforcement. 
Defenders believes that because conditions are so terrible now, 
and the prospects of improvement without NAFTA so bleak, there is 
a strong case that can be made in favor of NAFTA. 

As to the implications for international trade and 
environment policy, NAFTA breaks ground in a number of 
significant areas that should offer future benefits. But the 
current NAFTA package also suffers from a tragic flaw that 
directly, and perhaps fatally, undermines U.S. efforts to promote 
perhaps the most important principle of the trade and environment 
relationship — that non-discriminatory trade measures to 
protect living natural resources are legitimate environmental 
tools, even when such measures are aimed at process methods. 
Unless and until this principle is clearly recognized, we cannot 
endorse NAFTA. And, unless and until this principle is clearly 
recognized, a sustainable trading regime is not possible. 



10 




139 



Working for th« Nature of Tomorrow 

NATIONAL WILDLIFE FEDERATION 

1400 Sixteenth Street, N W.. VVashington, D C 20036-2266 (202) 797.6800 



TESTIMONY OF JAY D. HAIR 

t^ESroENT OF THE NATIONAL WILDLIFE FEDERATION 

BEFORE THE HOUSE COMMITTEE ON MERCHANT MARINE AND FISHERIES 

ON NAFTA AND ENVIRONMENTAL CONCER>S 

November 10, 1993 



Good morning, Mr. Chairman. I am Jay Hair, President of the National Wildlife Federation. 
The Federation is the nation's largest private conservation organization, dedicated to the 
sustainable management of natural resources and protection of the global environment. 

I appreciate the opportunity to testify today on NAFTA and the environment. In addition to 
local organizations like the Central Arkansas Audubon Society, the Florida Wildlife Federation, 
the Tennessee Conservation League, and several others, the NAFTA is endorsed by the National 
Audubon Society, the World Wildlife Fund, the Natural Resources Defense Council, the 
Environmental Defense Fund, Conservation International, and the National Wildlife Federation. 
Wc strongly urge the Congress to approve this vitally important agreement. 

Members of this Committee know that NAFTA cannot possibly solve all the environmental ills 
v^'C face in North America. Nor would it be accurate to say that NAFfA is capable of 
remedying the environmental deficiencies of the General Agreement on Tanffs and Trade 

fGATT). 

At the same time, environmental groups who continue to oppose NAFTA, despite iis obvious 
benefits, argue that passage of the agreement will "compound" our environmental problems. 
As Vice President Gore has responded on several occasions, they arc simply wrong. 

The truth is that these organizations will never be satisfied with this or any other trade 
agreement. Tbey will continue to raise the bar of environmental expectations ever higher. Their 
goal is not wtefomi NAFTA, but to kill ii. 

The National Wildlife Federation, the first conservation group to get the ball rolling on trade and 
environment over four years ago, plays the game differently. We recognize that members ot" 
this Committee have grown weary of the political posturing and emotional hysteria characterizing, 
the NAFTA debate. Yeu do not want to hear that NAFTA is going to kill puppies, or represent 
the end of democracy... or render paradise on Earth. What you need are the cold, hard facB 
about NAFTA and the environment. That is what our testimony delivers. 



140 



Mr. Chairman, the probability that any of the conservation laws of interest to this Committcf 
would be undermined by the NAFTA is extremely remote, and that erosion would, in fact. 
become Igss likely if NAFTA is approved. 

To begin with, for a law to be- challenged it would have to contain a provision dealing \nth 
trade. Non-trade provisions simply do not come under the purview of NAFTA. Therefore, the 
accusation made in some of the fundraising letters of groups opposed to NAFTA, that NAFTA 
requires a wholesale roll-back of environmental laws in this country, is simply not true, 
especially since the majority of these laws address domestic issues and do not contain trade 
measures. 

Second, in order to challenge a conservation law there must be provisions in NAFTA designed 
specifically for that purpose. The good news is that NAFTA was negotiated specifically to 
promote sustainable development and liaid challenges to laws designed to achieve that goal. 
Article 1114 (a) of the NAFTA text is but ore example of NAFTA's intent. l\ states that, 
"Nothing in this Chapter [on Investment] shall be construed to prevent a Party from adopting, 
maintaining or enforcing any measures... that it considers appropriate to ensure that investment 
activity in its territory is undertaken in a manner sensitive to environmental concerns. " NAFTA 
is rich in environmentally beneficial measures, many of which are discussed in the course of this 
testimony. 

Third, for challenges to environmental laws to occur, complaints would have to be brought by 
our NAFTA partners, Canada or Mexico. Some of the scare stories become even more fantastic 
when one realizes that Mexico and Canada are unlikely to challenge most of the laws cited by 
NAFTA opponents. Is Mexico going to challenge the Agreement on the Conservation of Polar 
Bears? Are either Canada or Mexico going to challenge our tough laws on driftnet products, 
given that neither of those countries is fishing with driftnets? Are either of these countries going 
to challenge the Wild Bird Conservation Act of 1992. given that both countries prohibit the trade 
of wild birds? 

Fourth, even if all of the necessary conditions occurred, there would be an extended period of 
consultation between the disputing parties before a dispute resolution panel was formed. 
Environmental critics of the NAFTA claim the resolution of disputes involving the non- 
enforcement of environmental laws will take months . Those familiar with trade practices know 
that challenges to countries' environmental laws will take years , with plenty of opportunity in 
the interval for the dispute to be resolved before any decision could be rendered. The laws 
passed by this Committee have been around for decades, and you all know that trade challenges 
to our laws have been few and far between. If NAFTA is passed, challenges to these laws 
become even leis likely. 

Fifth, if a dispute ever reaches a panel, NAFTA gives us several ways to defend our laws thai 
arc superior to those currently available under the GATT. NAFTA Article 1114 (a), cited 
above, is one such example. Coupled with NAFfA's Preamble, which commits the Parties to 



141 



"Promote sustainable development," and "Strengthen the development and enforcement of 
environmental laws and regulations," it sets the stage for a successful defense of our laws. 

Mark Silbergeld, Director of the Washington office of Consumers Union, also cites a number 
of provisions in NAFTA, including Anicles 712. 713, 714, 723 and 724, which make il clear 
that national governments have the right to set food safety standards at the highest level they 
deem appropriate. Consumers Union has not taken an overall position on NAFTA, and the 
evidence they have provided is as even-handed and objective as one is likely to find at this point 
in the debate. I have included his letter as an appendix to this testimony. 

There are also several Anicles in Chapter 9 of the NAFTA text that will help us defend our laws 
if that becomes necessary. Article 904 is one of the clearest, and it says: 

"Each Party may, in accordance with this Agreement, adopt, maintain or apply 
any standards-related measure, including any such measure relating to safety, the 
protection of human, animal or plan: life or health, the environment or 
consumers, and any measure to ensure its enforcement or implementation. Such 
measures include those lo prohibit the importation of a good of another Party or 
the provision of a service by a service provider of another Party that fails lo 
comply with the applicable requirements of those measures or to complete the 
Party's approval procedures." 

I do not think there could be a more convincing argument in favor of the NAFTA than the 
NAFTA itself, and the examples cited above, all of which are found in the NAFTA text , 
illustrate my point. As the new Prime Minister of Canada. Jean Chretien, said after winning 
election, "In our program, we were asking for changes to NAFT.^. Two have been dealt with. 
labor and environment." 

Given that NAFTA makes substantial improvements over the GATT. and reduces the probability 
of successful challenges to our laws to near zero, it's hard to imagine how killing NAFTA could 
advance the concerns of this Committee. 

This becomes an even more obvious conclusion when examining specific pieces of legislation 
of interest to the Committee, a process to which the next section of this testimony is dedicated. 

The Wild Bird Conservation Act of 1992 

Mr. Chairman, one of the laws that opponents of NAFTA say will become endangered if 
NAFTA passes is the Wild Bird Conservation ACI Of 1992. As you know, the Act makes an 
important contribution to the conservation of exotic wild birds by assisting management 
programs in countries of origin of wild birds, and by limiting or prohibiting the imports of wild 
birds when necessary to achieve the goals of the legislation. 



142 



In evaluating the trade implications of these laws, it is imponani for the members oi thii 
Committee to receive consistent and reliable information from groups purporting to represent 
wildlife concerns. Therefore, I think it is worth citing some important testimony delivered 
before your Committee on June 16, 1992. On thai day, almost a year after the GATT decision 
on the tuna-dolphin dispute, Dr. Oerard Bertrand of the Massachusetts Audubon Society spoke 
about several aspects of the Wild Bird Conservation Act. Or. Bertrand is a distinguished 
biologist and an attorney. He knows this issue well. He spoke on behalf of a long list of 
groups, many of whom now oppose NAFTA, including Friends of the Earth, Defenders oT 
Wildlife, the Humane Society, and several other animal rights organizationi. 

Among other issues, Dr. Bertrand assessed the relationship between the then-pending Wild Bird 
Conservation Act and the GATT. I would like to quote this portion of his remarks in full 
because it illustrates the inconsistencies in current arguments made by those out to kill NAPTA; 

"A federal import ban on wild birds is net likely to prompt a complaint under the 
GATT for several reasons. First, GATT is an unratified agreement between 
contracting parties. As such, it has limited legal effect and is superseded by the 
subsequently ratified CITES treaty-which specifically deals with the issue of 
commercial use of wildlife. CITES authorizes and encourages member nations 
to adopt stricter domestic legislation to protect endangered and threatened 
wildlife. Many nations have already adopted such legislation, in the form of 
unilateral import or export bans, without being the subject of any GATT 
complaints. 

Second, the Parties to CITES have since 1976 supported a resolution calling for 
restrictions on the taking of wild animals for the pet trade and the use of captive- 
bred animals for this purpose. H.R. 5013 would operate to encourage captive 
breeding as an alternative to the unsustainable taking of wild birds for use as pets, 
and thus is fully consistent with the current goals and requirements of CITES. 

Third, even GATT itself recognizes exceptions for measures "necessary to protect 
human, animal, or plant life or health (Article XX (b)) and for those "relating to 
the conservation of exhaustible natural resources if such measures are made 
effective in conjunction with restrictions on domestic production or consumption 
(Article XX (g)). Either of these exceptions would apply to the pending 
legislation. Domestic legislation prohibiting the commercial importation of wild 
birds is fully consistent with the United Sutes l^cey Act and the Migratory Bird 
Treaty Act. which prohibits the commercial exportation of our native bird 
species." 

Mr. Chairman. Gerry Bertrand and the Massachusetts Audubon Society are effective and 
articulate defenders of bird life and habitat and their fine reputation is deserved and well-known. 
Nevertheless, it is difficult to imagine how grouos endorsing this testimony could (ell you a year 



143 



ago that the Wild Bird Conservation Act would pass muster at the GATT but tell you today u 
runs counter to the more environmentally progressive NAFTA. 

I am not sure I agree with their rosy assessment of GATT, but even so there are several reasons 
why passing NAFTA strengthens our ability to defend this legislation from trade challenge. 

NAFTA allows the country defending a given measure from challenge to choose lo have the 
matter adjudicated under NAFTA rather than GATT. NAFTA also affords a more secure 
environment for making such a defense in four ways. First, Article 2101.1 of NAFTA improves 
on the Article XX exceptions under GATT. Second, NAFTA explicitly frees CITES from 
challenge (See NAFTA Article 104). Third, NAFTA allows countries to call on scientific 
experts in environmental disputes (See NAFTA Articles 2014, 2015). Lastly, the standard 
NAFTA sets in Chapters 7 and 9 for allowing such measures is far more permissive than the 
GATT. 

If increasing the security of the Wild Bird Conservation Act is your aim, the best thing you can 
do is pass NAFTA, not kill it. 



The Pelly Amendment of 1978 and 
The Drlftiiet Act Amendments of IWO 

Another problem with environmental arguments against NAFTA is that they present only pan 
of the picture. A good case in point is the assertion that the Pelly Amendment would somehow 
be endangered by passage of the NAFTA. 

First, it's hard to imagine which specific articles of the NAFTA could be used to challenge the 
Pelly Amendment, and which provisions of the Pelly Amendment itself would create such a 
conflict. But opponents of trade with Mexico also neglect to tell you that the Pelly Amendment 
is designed specifically to avoid trade conflicts. While the Amendment allows the Secretary of 
Commerce to impose a trade restriction on a country that docs not adhere to its obligations under 
an international fisheries conservation agreement, it allows such a trade measure, only "to the 
extent that such prohibition is sanctioned by the General Agreement on Tariffs and Trade " 

The problem with the Pelly Amendment is not the NAFTA, it is the GATT. If a future 
challenge to the Pelly Amendment were to be launched by Canada or Mexico they would do so 
by claiming that actions taken pursuant to the Pelly Amendment were in violation of our GATT 
obligations. 

Concerns raised about the fate of the Driftne: Act Amendments of 1990 reveal a similarly 
distorted view of what is likely to happen if the NAFTA passes. As you know. Mr. Chairman. 
the Driftnet Act was passed pursuant to U.N. General Assembly Resolution 44-225 which wa^ 
approved on December 22. 1989. The resolution calls for a moratorium on the use of dnftnets 
beginning no later than June 30, 1992. The Driftnet Act seeks to secure a permanent ban on 



144 



the use of destructive fishing practices, and in particular large-scale driftnets. by individuals or 
vessels operating beyond the exclusive economic zone of any nation. More specifically, the Ac; 
allows for a prohibition on the imports offish and fish products and sport fishing equipment by 
any nations failing to adhere to the moratonum called for in the U.N. General Assembly. 

Even if conflicting provisions of NAFTA could be identified, there is one important reason such 
concerns are illusory-Canada and Mexico do not use diiftnets. 

The resolution adopted by the U.N. General Assembly is supported by Mexico and Canada, and 
even if all of the other conditions necessary for a trade challenge were satisfied, the most 
reasonable conclusion we can draw is that NAFTA is largely irrelevant to the Driftnct Act. 
Sanctions we are most likely to apply under this Act will be directed at countries other than our 
NAFTA partners. 



Marine Mammal Protection Act of 1972 and 
the International Dolphin Conservation Act of 1992 

Mexico launched a chaJlenge to the U.S. Manne Mammal Protection Act in 1991, and a GATT 
panel ruled in their favor in August, 1991. That ruling has not yet been adopted by the full 
GATT Council. 

The tuna-dolphin decision highlighted the severe shortcommgs of the GATT, the provisions of 
which were written almost a half century ago. Clearly, there is a need for a vast environmental 
overhaul of the GATT system; in fact the agreement is so out-dated that the word "environment" 
does not appear anywhere in the text. But to reium to the question at hand, how does killing 
NAFTA help protect the Maine Mammal Protection Act?" 

Opponents of trade with Mexico claim, in one of their most creative arguments, that GATT 
provides an "appeals mechanism" for decisions or. conservation measures. They are referring 
to the fact that GATT panel rulings do not become official until they are subsequently adopted 
by the full GATT governing council (Article XX1II.2). Though it's hard to believe, they cite the 
GATT dispute resolution process as evidence that the environment would be better off under the 
GATT rather than the NAFTA . 

It's not surprising that opponenxs of NAFTA should find virtue in anything they believe will help 
stop trade with Mexico.- but praising GATT dispute resolution processes as superior to NAFTA 
is wrong-a straightforward error. NAFTA provides much more effective tools for defending 
our standards, especially in comparison to the GATT. Moreover, the GATT dispute resolution 
process can hardly be termed an "appeals mechanism." Since GATT parties lightened up the 
rules in 1987, not a single panel ruling has been overturned by a member of the GATT council. 

Passing NAFTA at least gives us some protection in the unlikely event that future challenges to 
the Marine Mammal Protection Act arise from Mexico or Canada. But this Committee should 



145 



also keep in mind the extremely low probability that such challenges will ever anse. especially 
given that Mexico has already won a GATT panel decision on this subject. 

With respect to the International Dolphin Conservation Act (IDCA), which requires the U.S. 
government tc seek a global moratorium on the encirclement of dolphin in tuna nets, it's hard 
to imagine how opponents of NAFTA can claim the agreement will we^en this Act. Kilhng 
NAFTA as they suggest merely puts the issue squarely back m the hands of the GATf where 
the U.S. would have to prevail not against two countries, but against over a hundred countries, 
many of whom may be hostile to this kind of legislation. 

If, on the other hand, NAFTA is passed, we have a better footing tor defending laws like the 
MMPA and the IDCA, especially given the various benefits of NAFTA outlined above. 

The Endangered Species Act 

the Lacey Act as amended in 1981. and 

Conservation of Sea Turtles: Importation of Shrimp 

Mr. Chairman, the National Wildlife Federation is pulling out all stops to assure a successful 
reauthorization of the Endangered Species Act We could not suppon the NAFTA if we thought 
passage of this agreement would in any way endanger the ESA. 

Section 1538 of the ESA generally prohibits the import or cxpon of endangered species into or 
from the United States. This provision is essential to securing the objectives of this Act bui 
passing NAFTA will strengthen , not weaken, our Nation's ability to defend it in the event of 
challenge. 

To begin with, this provision is generally consistent with the goals of CITES, an international 
convention which is specifically identified in NAFTA Article 104 as free from a threat of 
challenge. Moreover, both Canada and Mexico are signatories to that Convention, so the threat 
of challenge from those countries is unlikely 

Finally, the import and export restrictions are ciearly designed to support a legitimate purpose 
(i.e. the protection of listed species) and arc not discriminatory since they apply domesiicall) 
as well as to foreign goods. Thus, these reiinctions should meet the standard established in 
Chapter 9 of the NAFTA text and not be subject to successful challenge. 

The CITES convention is nowhere listed as free from challenge under GATT, and GATf does 
not allow for environmental experts to be brought in during dispute proceedings. Section 1538 
of the ESA hardly seems endangered by NAFTA, and passage of the NAFTA would in fact 
strengthen defense of this legislation. 

The Lacey Act as amended in 1981 prohibits the. "unlawful import or export... in interstate or 
foreign commerce fish and other wildlife in violation of any state, or any foreign law." 



146 



In other words, under the Laccy Act there is a prohibition on the taking and subsequent 
importation of wildlife, whether or not it is endangered, if the wildlife is taken in vi olation cf 
the exponing coyntnes law^ 

It is hard to imagine a plausible scenario under which Mexico or Canada would challenge this 
law. It would be one thing if the law were written to exclude imports in violation merely of our 
laws, but the legislation is actually much tougher, and uses the exporting country's own 
standards as a test. With what degree of seriousness would a country challenge the imporuition 
of a product that was directly m violation of its own laws? 

Finally, our sea turtle legislation (Public Law 101-162. Title VJ, section 609) also contains a 
provision which in general prohibits the importation, "of shrimp or products from shrimp which 
have been harvested with commercial fishing technology which may affect adversely... species 
of sea turtles. . " 

Canada does not have a shrimp industry and is not likely to be involved in this issue. But how 
has Mexico responded to this law since it was enacted? 

In contrast to the horror stories launched by NAFTA opponents. Mexico has not raised a trade 
challenge to this law. In fact, Mexico has made significant efforts to assure that turtle excluder 
devices are used by ail of their shnmp fleet and for this reason they were certified by our 
Department of State on April 30, 1993 ai having complied with the objectives of this section of 
the Act. 

Clearly, pressure needs to continue to assure that Mexico's shrimp fleet meets the same 
standards as our own, but at least we shouid acknowledge that their response was oqj to 
challenge our laws under the GATT. If that jnlikely prospect remains a concern, the correpi 
response is to continue cooperative efforts with Mexico in sea turtle conservation, and to reforr 
GATT, Dfli kill the more cnvironmenttHy progressive NAFTM Put another way, the best way 
to defend the ESA and our sea turtle legislation, is b\ passing NAFTA, not by rejecting it 

The National Wildlife Federation believes N.*>FTA will help meet the obvious and appropriate 
aims of this Committee: to assure the protection of '.he many fish and wildlife conservation laws 
under its jurisdiction. Killing NAFTA is clearly inconsistent with the fundamental aims and 
responsibilities of this Committee. 

Clean Water Act 

NAFTA in no way weakens the Clean Water Act, despite the allegations made by opponents of 
trade with Mexico. 

NAFTA preserves our ability to maintain and raise our water quality standards. This is affirmed 
in Chapter 9 in the NAFTA. Article 904.1 iiates "Each Party may, in accordance with this 
Agreement, adopt, maintain or apply any standards-related measure, including any such measure 



147 



relating to safety, the protection of human, animal or plant life or health, the environment or 
consumers, and any measure to ensure its enforcement or implementation. " 

Article 904.2 goes on to state that "each Party may, in pursuing its legitimate objectives of 
safety or the protection of human, animal or plant life or health, the environment or consumers, 
establish levels of protection that it considers appropriate..." NAFTA defines "legitimate 
objective" as an objective pertaining to "safety, protection of human, animal or plant life or 
health, the environment or consumers, including matters relating to quality and identifiability 
of goods or services, and sustainable development (See NAFTA Articles 915. 1 a.b.c). 

To be sure, there has been a great deal of misinformation as to the effect on the Clean Water 
Act of projects located along the border and financed by the Border Environmental Financing 
Facility. The goal here is to clean up the border, and these new projects will help achieve that 
goal both in Mexico and in the United States. As a general rule, projects with a transboundary 
effect will obey the highest of the standards in Mexico or the U.S. However, if the choice is 
between constructing a new water treatment plant and accepting a Mexican, rather than a U.S. 
standard, or not building a plant at all, local citizens will be able to make that the ultimate 
choice. 

Providing for citizen participation and decision-making at a local level does nfli amount to 
lowering our standards under the Clean Water Act, and this is why the approach cited above 
enjoys the strong support of groups like the Texas Center for Policy Studies. Given the unique 
conditions along the border, this arrangement is not likely to be replicated elsewhere, and should 
not be perceived as a threat to the Clean Water Act. 

With respect to border funding, it is wrong to assume that the environmental clean-up package 
endangers the objectives of the Clean Water Act. 

S2 billion will be provided for border clean-up through a World Bank loan to Mexico, and from 
Mexican counterpan funds. This money will be used to finance environmenwl projects that will 
lead to a cleaner environment in the border area, and achieve its goals through the kmd of 
institutional reforms that empower decision-making at the local and state level. 

A second ponion of the clean-up package. S2-3 billion in total financing costs, will be everagcd 
from S450 million worth of paid-in capital divided evenly between the government of Mexico 
and the United States over the next four years. These funds will not be raided from the money 
used to implement the Clean Water Act, though the projects financed under this new structure 
will be used for activities such as wastewater treatment and sewage treatment. 

A third ponion of the package, approximately S2 billion in the State Revolving Fund (SRF) 
program, will also be directed toward the border. Allocations from these funds will continue 
to be based on long-standing criteria that will not result in drawing support away from other 
important clean-up efforts around the U.S. 



148 



10 



A fourth component of this package derives from the $1.4 billion that Mexico and the U.S will 
contribute, in equal parts, towards grants for wastewater treatment along the border. These 
funds are incorporated in the Administration future budget planS: and a commitment has been 
reached for the Mexican agency, SEDESOL, to contribute its share of $700 million. 

Finally, the Administration has calculated that $600 million in private sector fmancmg will be 
available for border clean-up efforts. 

In addition to the environmental groups supporting NAFTA, organizations such as the National 
Council of La Raza, Southwest Voters Research Institute, and the Mexican American Legal 
Defense Fund, and other groups located along the border, strongly endorse this important 
breakthrough. It is unfonunate that organizations which profess to a concern about clean water 
would possibly construe this progress as a step backward, or a threat to the Clean Water Act 
The only thing the border plsin is a threat to is the unacceptable status quo. 



Raw Log Exports 

Another concern raised by opponents of trade with Mexico is that NAFTA will prohibit our 
ability to ban the export of raw logs for conservation reasons. 

Given the array of general environmental provisions in NAFTA which support a country's right 
to do just that, it's hard to understand how this allegation can be made. But even if those 
general provisions weren't available, one need only consult Annex 301.3 (Section C--U.S. 
measures) of the NAFTA text for reassurance. Critics of NAFTA charge that Chapter 3 of the 
NAFTA text prohibits a ban on raw log exports, but Annex 301.3 states the opposite: "Articles 
301-309 shall not apply to controls by the United States on the export of logs of all species," 

To say that passage of NAFTA will impede our right to restrict the export of raw logs simply 
does not square with the facts. 



Conclusion 

Mr. Chairman, ane of the central issues for this Committee is assuring our right to limn market 
access based on the way goods are produced or processed. We do not advocate this as a 
protectionist device, and great care should be given to the exact manner in which we make 
restrictions in this area. But in a global economy, we cannot set one standard on our producers 
here at home, and expect them to be able to compete fairly with foreign producers who do not 
protect the environment. We have to be able to restrict imports, in a non-discriminatory way 
and for a legitimate conservation purpose, in order to protect our own environmeit. 

The National Wildlife Federation strongly supporu this basic right, and believes this will be a 
centerpiece of future GATT reform. ; We will my accept a blanket prohibition on this right, and 



149 



11 

we are pleased that the Clinton Administration will make this issue a high priority at the GATT. 
The work plan they envision for the GATT, as indicated in an October 26, 1993 letter from 
U.S. Trade Representative Kantor to Cong. Waxman, "would of necessity have to include a 
thorough examination of the adequacy of the GATT's substantive rules as they relate to PPMs 
[process and production methods^." 

At the same time, as we pursue environmental protection we must avoid the kind of narrow 
economic protectionism that retards sustainable development here at home, and in the developing 
and poorest countries of the woAl. As Greenpeace said at the time the original GATT ruling 
on tuna-dolphin was handed down: 

"The U.S. embargo of Mexico's tuna has been like the pot calling the kettle 
black. Greenpeace believes that the U.S. government should adopt a global 
perspective toward solving this and other international environmental issues and 
not indulge in what could be seen as 'eco-colonialism'...The bottom line is that 
no nation should be allowed to hide its economic agenda behmd the mask of 
environmentalism." 

It's too bad Greenpeace did not follow its own advice with respect to NAFTA, and while I thinU 
their view of the tuna-dolphin decision is too sympathetic to GATT, their sentimenu on thai 
dangers of protectionism are well-found*!. If we are to preserve the spirit of the Rio Earth 
Summit, and promote sustainable development at home and abroad, we must not allow 
environmental concerns to be used to advance an alien agenda. 

NAFTA represents a model for crafting a trade document in the era of sustainable development. 
It is certainly not everything we wanted, but 1 assure you there are some members of Congress 
who think it goes ujc £a£ in protecting the environment. When I said earlier that Congress does 
not need to hear hyperbole, like NAFTA will kill puppies or end democracy, I was not 
exaggerating. There are groups that have made these allegations, including one animal welfare 
organization which said, in a recent fundraising leuer, "...gains we have made against thes« 
terrible puppy mills. ..as well as every other animal protection gain we've made over the paft 
25 years... will be meaningless, worthless, if Congress approves the North American Free Tradj 
Agreement.^! 

These issuoFire too important to be used simply as grist for fundraising cffonj, or as clever 

sound bites for the media. To make progress :oward sustainable development means combining 
economic progress and environmental protection and playing it straight on these issues. As I 
hope my testimony has made clear, passing NAFTA is the surest way to strengthen the 
environmental laws we all believe are of fundamental importance. 

Finally, Mr. Chairman, we know that the most difficult issue for Members is not environment, 
but jobs. 



150 



i: 



As an environmental group, we have struggled to decide what is appropriate for us to say about 
NAFTA and jobs. We have decided that we cannot avoid comment, and are emboldened, at 
least to some degree, by the instant expertise of some factions of the anti-NAFTA organizations 
who say NAFTA will iosg jobs. 

While some workers will be hun in the transition set in motion by NAFTA, a greater number 
will benefit, and killing NAFTA only makes everyone worse off. Transitions are a fact of life. 
with or without NAFTA, and one of the best things we can do in this country lo create jobs is 
to plan for the future. If we cannot deal with transitions with respect to NAFTA, which will 
have a minimal effect on our economy, how are we going to deal with the transitions that are 
inevitable in an ever-changing global economy and a world beset by changes that are both good 
and bad? 

One of the best things we can do is emphasize industries where we have a comparative 
advantage. One example, from among many, is the environmental services and environmental 
technology industry in the United States. There are hundreds of these firms, including U.S. 
Filler in southern California; the Crom Corporation in Florida; American Environmental Labs 
in Massachusetts; Earth Sciences Consultants m Pennsylvania; the GNI Group in Texas: and 
Hart Crowser, North Creek Analytical, and Prezant Associates in the state of Washington. 

There is overwhelming support in this job- creating sector of our economy for NAFTA because 
it immediately removes Mexican tariffs for our environmental goods and services and makes our 
companies and technology more competitive in the Mexican market. This will allow these firms 
to increase employment in this country, and make a profit by cleaning up the environment. 

I do not want to suggest that environmental services and technology represents a solution to the 
all of the legit.maie fears and concerns of the American workforce. But facing the future, rather 
than running from it, is always a better strategy in times of change. As Congresswoman Nanc> 
Pelosi said in announcing her support for NAFTA, "My decision is ultimately based on the 
belief thai the economic status quo is completely unacceptable and that we must move forward, 
as a nation, into the future. ..1 am convinced that in order to compete globally, we need a 
NAFTA, and that NAFTA must be passed at this time." 

There are few individuals in the U.S. Congress who have defended workers' rights and the 
environment as well as Congresswoman Pelos:. 1 think her words are a filling conclusion to this 
testimony, and 1 urge the members of this Committee to support NAFTA for the workers aUd 
the environment of this country --and its two neighbors. 

Thank you, Mr. Chairman, I am prepared to answer any questions you or other members oi 
tlie Committee may have. 



151 




PuCitnAr of Contufttcr Rcponi 



Ootob«r 20, 1993 

\ 

KonerabI« Robert: T. Matsul 
Honorable Ron Nydan 
U.S. House of Rapr*s«ntatlvaB 
Washington DC 2051S 

Osar R«pr«s*ntatlv«s Hatsui and Wydan: 

This is in response to your inquiry of Ootober 19, regarding 
the potential effect of the Korth Aaerican Free Trade Xgreaaent on 
current U.S. food safety and environmental lavs. 

As your letter notes, Consuaers Union is neutral en this issue 
and takes no position urging Members of Congress either to support 
or to oppose the agreement. 

We have examined KXfTX's likely impaot on food safetyi end 
believe that the agreement offers adequate protection in this area. 
In addition, we believe that KXFTA would eetablish seme very 
important gaina and preaedents for addressing environmental 
ooncerns. 



lavlroament. No trade agreement can solve every environmental 
problem in a country or group of countriee, and it would not be 
reasonable or prudent to expect NATTA to do this. NAFTA gees much 
farther than other international trade agreements in addressing 
environmental cenoerns and, in that rogard, it raprasents a 
pioneering effort that can serve as a model for futura agreements. 
NAFTA also creates an 98 billion fund for environmental elean*up on 
the U.S.-Xexiean border. 

Zt is important to recognize thet under NAFTA, national 
gevsraments would continue to have a large and important role to 
play in protecting public health and the environment. Snforoement 
of environmental laws and regulatione ie In the first instance a 
deaeatic reeponsibllity and obligation. Urtder NAFTA, the eignatery 
countries would remain sovereign actors that retain the right and 
responsibility to adopt and enforce soience-besed, risk-averee 
public health and aafety etandards. 



MMNngtenOflie* 
laaa Conn«ctieut Avanu*. Suit* VO* Wtshlngten. DC. 30009-1 OM* (302) 4tt42a2 



152 



feed lafatv. Th« following analyele addr««««B the questions 
that SOBS have raised regarding the effect of the HAFTA Sanitary 
and Phytesanitary Measures Agreement (8*P) might have on currant or 
future U. 8. food safety standards. As tha eomaants halow indioata, 
we eonelude that U.S. food safety laws ean adaquataly ba 
characteriiad as secure from succassful MAFTA challangaa, so long 
as thess standards are not trada-discriminatory. 

I would like to preface my spacifio analysis with a gansral 
observation that has perhaps bacn overlooked wi«i respsot to the 
S&P agrsamsnt. The agreement has bsen viewed by its critics simply 
as a vehicle by whioh U.S. food ssfsty measurss ean be chaXlangad. 
This overlooks that the 8tP is also a vehiola by which U.S. food 
safety measures can b« sucosssfully defended in ohallangas th»t 
othsrvise could ba brought under the OATT General Agreement. The 
orocass and reaaoning uaed in developing U.S. food safety maasuras 
is basically compatible with the fltP raguiraments . Not only were 
thaee reguiremants negotiated with the intent of assuring that this 
is the ease; speeifio improvements were made to ambiguous Stf 
orovisiona in the Uruguay Round "Dunkel draft". Without the B(P 
aoraements of either the HAFTA or the Uruguay Round (assuming there 
is to be a new 6ATT agreement), U.S. food safety measures are 
subject to OATT challenges undsr an existing procedure in which 
there are far fewer definitions as to what eenatitutes a defensible 
food safety standard. This protective aspsot of tha proposed KATTA 
rules should not be overlooked in evaluating the sitP agreement. 

1. Vbe reguirameat that aatieaal S«P measures be **BeeessasyN 
for health proteetiea is set a threat to u.a. feed safety 
raquireaeata. 

It has been assarted that the NAFTA SAP text adopts a OATT 
test that a national food safety aeaaure be the "least trade 
rsatrietive'* maasure neoessary to achieve the underlying national 
purpose. This argument rests on tha incorrect assertion that the 
NATTA incorporates by reference tha jurisprudence of the OATT. It 
alao reata on the incorrect aaaumption that tha OATT actually 
imposes a "least trade restrictive" tsst on feed safety and 
environmental measures. 

MATTA does not incorporate OATT jurisprudence by referenee, as 
has been assarted. Although in Article 103.1 tha NAFTA parties do 
affirm to each other their OATT rights and obligations, this is a 
general reaffirmation; it does not refer in any way to OATT 
jurisprudence. Further with respect to QATT jurisprudence, the 
**laast trtda rsttrletiva" l&nguaga haa been used only in a small 
nuaber of GATT dispute resolution panels; tha daoisiona of thsse 
panels have no binding preoedence even on other OATT panels, let 
alona on panels that may be convened in the future under NAFTA or 
any ether agreement. OATT panel reports are not strietly 



153 



coaparabla to judicial opinions in U.S. jurisprudanc*. Thoy ara 
p«r«uaaiv«/ net praaoriptiva, and thair purpoaa ia to "gain 
approval of tha CATT Council for tha solution workad out by tha 
panal." P. Paaoatera, w.J. Davay and A.F. Lowanfald. HandbaaV of 
oxTf Diap»n-« aatfciaaant . p. 2-16. "A report, in and of itaalf, has 
no forea. It is only tha opinion of tha panal mambars. It must ba 
adoptsd by tha Counoil on bahalf of tha contraating partiaa." li, 
p. l-«8. 

Atlaast ena o£ tha GATT panal daoisions that usad tha "laast 
trada rastrictiva" languaga has not baen adoptad by tha OATT 
Council; it is undar discussion by ths p«rtias and may naver b« 
implamantad. 

It is not in any sanaa aoourata, tharafora, to suggast that 
lass than a handful of CATT panel opinions would control tha 
aaaning of tha tarn "nacassary" aa it is usad in tha KA9TA S&P 
agraaaant . 

Mora importantly, U.S. Trada Raprasantativa Aabaaaador Miehaal 
Xantor haa atatad in a lattar to tha Natural Rasoureas Dafansa 
Cotinail datad Saptaabar 13, 1993, tha guastion was disaussad in 
NATTA nagotiationa whathar tha uaa of tha word xnaoassary" would 
laad to a "laast trada raatriotiva" taat for U.S. safftty standards. 
Tha nagotiators agraad that tha anawar to thia q[usstion is "no**. 
It is avan more difficult to understand in light of tha USTR'a 
stataaant how a GATT panal daoision would ba usad in a NAFTA 
dispute to contradict the explicit understanding of the NAFTA 
parties. 

Further, construing the tera "neeeseary" in this manner to the 
end of atriking down existing U.S. food aafaty measures would be 
coapletely contrary to the health-protective iaproveaents in the 
NAFTA 6(F text that were made in response to the expreaaion of 
specific eonoems about the Dunkel draft s&p Agreement. in 
response to criticisms of ambiguous or inaxaotly-drafted provisions 
of the Dunkel draft g(P, the NAFTA StP Agreement inoorporatad at 
least five major changes to aake clear that national governments 
have the right to maintain vary atrict food safety atandardsi 

1. each nation has the explicit right to maintain 
netienal food aafaty standards mors stringent than 
international standarda (Article 713.1; tee alao Artiole 
713. a, 3); 

3. each nation haa the axplioit right eo establish its 
own national level of food aafaty protection (Article 
712.2) and to determine that tha exporting party 'a 
atandards do not meet ita own appropriate level of 
protection (Article 714.2(a); 

3. NAFTA member gevamments are asked not to reduce or 

3 



154 



h»raoni«« national food aataty atandarda downward 
(Artlclaa 713.1, 714.1; 

A, tha burdan of proof in a NAFTA diaputa ovar tha 
validity of a food safaty atandard it elaarly atatad to 
11a with tha ohallangin? party (Xrtiola 723.6); and 

S. a dafinition of tha term "aoianoa-baaad" ia includad 
that r«Bevaa any diaputa ovar tha validity of a food 
aafaty meaaura froa tha previnoa of "dualin? soianoe", ae 
that tha oha Hanging party cannot aaak to aubatituta ita 
own aeiantifio judgmant or that of a diaputa raaolution 
panal for the aoiantifio judgaant on which tha challongad 
national aafaty aaasura ia baaed. (Artiola 724) 

Tha Buggaatien that tha tarn "naeaaaary" ia intandad to 
aubjaot national food aafaty judgnanta to ninuta acrutiny and 
aaoondogueaaing on a aoianea or piiblio haalth policy baaia (aa 
oppoaad to a trada diaorimination bails) it tVU)dftmantally 
ineonaistant with thaaa NAFTA previsiona. Thay olaarly ar« 
intandad to protect strict national aaaauras. The entire direction 
in whieh the KAFTA 8«P negotiatera improved upon the Dunkel draft 
S&P text underscores Aabassador Xantor's atataaant regarding the 
intent of the parties with respect to the tera "necessary". 

2. The Delaney Clause and ether laro-riak feed aafaty 
Meeeures axe &ot threatened by the requirement that S&f seasurea ke 
••eoleace-baaed" or based ea "risk assessment*'. 

It has been repeatedly atated by Aabaaaadors Hills and Xanter 
as well as offloiala of the Food and Drug Adainistration that the 
SAP's atandards for judging tha trade-restrictive intent of food 
safety measures do net threaten the Delansy anti-oancer food 
additive clause or other zero-tolaranoe policiea of the U.S. While 
these assartiona have been characterized by some as "\inilateral" 
and, hence, net binding, it is my understanding that these 
stateaents reflect the intent of all partiee to the MAFTA 
Agreeaent; Z as unaware of any evidence to the contrary. 

It haa bean the oonaiatent characterization of the text by the 
U8TR that the "seienae basis" requiraaant only appliea to 
laplaaentationa of social riak preference aoasures such as Delaney, 
not to the atatutory atatamsnt of national risk-avoidance 
preference itaelf. Soaa have refused to accept this 
characterization, but none haa been able to deaonatrata that the 
intent of the Agreeaent ia otharvise. 

Aocepting that axpreaaien of akepticiaa for the sake of 
argument, however, Delaney atill should not be in doubt under the 



155 



provlaiona of tb« NAFTA s&P t*xt. Artlola 712.2 assurss that Mch 
Party say aatabllsh it* own appropriata lavala ot protaotion. And 
whil* th« atatament of thla right rafara to tha uaa of riak 
aaaaaaaant, riak aaaoaanant faetora ara only raquirad to b« takan 
into account aa appropriate to tha oircuaatanoaa (aaa Articlaa 
712. 3 (o) and 719.1). Cartainly, a aaro-tolaranea prafaranca ia not 
one that ia appropriate to a feraal risk aaaaaaaant. Purther, 
Artlela 724 definaa "adiantifio baaia" to inciuda a raaaon baaad on 
information derived uaing aoientifio metheda. If need be, the 
Oelaney olauae certainly ean be juatified on the basis of a 
aeientifie judgment that no aafe level for human ingeation of food 
additivaa can be eatablished with certainty, allowing for a 
reaaonable margin of aafaty, if thoaa additivaa cauae eanear in 
laboratory animala, hence a eero- tolerance level ia appropriate. 

In our view, the charaoterization of the text aa providing a 
plauaible baaia for a aucoeaaful ohallenge of the Oelaney anti- 
canear clause cannot be auatained. 

Z hope that theae commenta are reapenaiva to yovur inguiry. If 
Z ean provide you with any other information, pleaae do not 
heaitate to inquire. 

sincerely. 




ireotox 
Maahington Otftioe 



156 



RESOLUnON NO. 93^266 

A RESOLUnON OF THE CTTY COUNCIL OF THE CITY OF IMPERIAL 
BEACH, CALIFORNIA, URGING THE GOVERNMENTS OF THE UNTIED 
STATES AND MEXICO TO ADDRESS THE ONGOING PROBLEM OF SEWAGE 
IN THE TUUANA RIVER, AND REQUESTING THE CITY OF SAN DIEGO 
TAKE ACTION TO MITIGATE THE EFFECT OF THE RELEASE OF WATER 
FROM THE BARRETT RESERVOIR ON THE CITY OF IMPERIAL BEACH. 



WHEREAS, millions of gallons of contaminants and raw sewage from Mexico is flowing 
dally into the TUuana River; and 

WHEREAS, this raw sewage causes contamination of the Tijuana River Valley and the 
waters and beaches of the City of Imperial Beach, denying our citizens the right to live in a 
pollution free environment and endangering the health of our citizens and children; and 

WHEREAS, the governments of the United Sutes and Mexico have been aware of the 
problem for some 13 years and have failed to alleviate this problem; and 

WHEREAS, the City of San Diego has indicated their intention to release approximately 
4,500 acre feet of pouble water from Barrett Reservoir into the Iguana River before November 
1, 1993 in order to prepare for the rainy season; and 

WHEREAS, the release of said water will cause flooding of sewage from Mexico into 
the Tijuana River which will sanirate our beaches and cause the beaches to be a hazard to the 
public health; and 

^yHEREAS. the contamination of our beach can result tai flnancial loss to local 
business and the Ci^ of Imperial Beach due to loss of tourism: and 

WHEREAS, a declaration of contamiration of the beach will result in a significant 
teduction in recreational opportunities for the residentt of die City of Imperial Beach, u well 
u visiton and in particular our children; and 

WHEREAS, the City of San Diego has been aware of disrepair of the Dulzura Conduit 
at Barrett Reservoir for some time and has not, until recently, taken action; and 

WHEREAS, it has been repotted that the Clinton administration is proposing creation 
of a joint United States-Mexican border audiority as a pan of the North American Free Trade 
Agreement (NAFTA), to pay for border area clean-up of contaminants. 

NOW, THEREFORE, BE IT RESOLVED, by the City CouncU of the City of Imperial 
Beach, Califortila: 



I 



157 



P«R«2 

Ruoludon No. 93-4266 



1) That dM Chy of Imiwiial Beich nqueiu Ae govenunenta of tbe United Sutei 
tnd M«dco to IminqdUtely begin working on solutioni for th« titan collection, 
treatment and conirol of contaminants and wwage flowing into the T^uana River. 

2) That the City of Imperial Beach oppoiei the ligning of the North American Free 
Trade Agreement (NAFTA) without proviaion for the clean-up of the T^uana 
River and collection, treatment and diiposal of Tijuana contaminants and lewago. 

3) That the City of Imperial Beach lequesti the City of San Diego to pos^one die 
release of water from Barrett Dam into the Tt)uana River until the dth of 
September, fbllowing the touriit ceaaon and tbe return of children to tchool. 

4) That the City of Imperial Beach requeiu the City of San Diego to immediately 
repair the Dulzura Conduit and to correct any other syatem deficienciet. 

PASSED, APPROVED AND ADOPTED by the Cit>' Council of the CiQr of Imperial 
Beach at Its regular meeting held this 4(h day of Auguai 1993. by the following vote to wit: 

AYESt COUNCILMEMBERSi GOEIHE. RASKINS. ROSE. BOBBINS, BDOiOl 
NOBSi C0UNCILMEMBKR5: NONE 
ABSENTi COUNCILMElVfBERSi NONE 




Michael B. Bixier. Mayor 



^ ^:^?g^XjL^ 




Hi^tldt . Coundimember 
Diane -Rom. CouBcllmambcr 



158 




ANIMAL PROTECTION INSTITUTE 

2t31l'nritftdgtRoad, P.O. Box 22S0S, SacwiMnto.CA 96622 (»ie)731-«a21 FAX (916) 731-4487 



Novemher 9, 199!) 



isSnioc* 



ey«»DOLYN MAY SCOLAChK 

nOWlANOL MTCHEU 

UAMTPmt 



OAvio J. eenxMAN 

Wdonil Mvlson Boml 
nOSERTSROWN 

^tavjfvmng 

tUnXt MAX mOMANN, OV.M . 



HooonUe Gerry E. Stodds, Qniniian 
Mercbaat Marine md Fisheries Committee 
1334 Loogwotth Bnikiii^ 
WashiBgtoa, DC 2031S-6230 

Dear Chairmao Studds: 

The Aimnal Protection Institute (API) is unaMe to afiend the November 10 
NAFTA/Envinnmental Hearing, but on behalf of our 1)0,000 member 
nationwide, we are submitting written testimoiy. 

Our memben are vitally interested in the con se rv a t i on and protection of wiklUfe 
and humane treatment standards. They have contributed to the passing of U.S. 
animal protection and wildlife conservation laws since our b^inning 25 ye»7 ago. 
Ow fear is that under the proposed NorA American Free Trade Agreement 
(NAFTA) those laws could be cfaolleaged as "non tariif barriors' to 'free trade". 
Congress could then be compelled to mpc9\ the legislation or pay heavy damages. 



Ffira<gn Advlaon 

ANOUSO. MoUREN 



BAHRy KENT UACKAV 
Ontario. CjfkMS 

Wmtitngton, O.C Office 

NANCY K 0AVE8 



MBS. FRANK Y.BRAOH, 



Therefore, as it is written and considering the tramerous 'side-agreements,' we 
can not support NAFTA. We have not had an opportunity to review Ae 447 page 
proposed legislatian and since we must be assured that sny leglslatioB cootain 
strong statutcffy (tirectives to protect existing laws and their intmt, we oppose 
NAFTA. Roadless of the Administration's assurances, without strong statutory 
provisions guaranteemg the protections ot domestic and wiidhle, NAFTA is a 
threat to umaveling vital current protectioas. 

This letter akmg with the atttcbed artide is API's offickl position. We request 
that tliey be made port of the official record. 




MAAMY OCAWNGKR 
COLETTE C. FABEn 



avid 
Executive DiiecbH' 



CHARLOTTE L B. PABKS 



159 



ANIMAL PROTECTION INSTITUTE 

November 1993 



Lost in the NAFTAmatfa 

Animal wel£n« laws protecting dol- 
phins, tropical birds, and endangered 
animals could be tbrown out if tbe current 
version of the North American Free Trade 
Agreement (NAFTA) goes into effect. 

NAFTA is a 2000-page agreement with 
Mexico and Canada that aims to create tbe 
largest trading bloc in the world by eliminat- 
ing, over a "transitioa period" of fifteen 
years, all tariff and trade harriers on goods 
originating in Mexico, tiie United States, 
and Canada. One provision of NAFTA is 
the tight uf member countries to challenge 
laws they r^ard as "illegal" barriers to 
trade, which could include animal welfiire 
laws. 

WHY NAFTA? 

Since Canada and the U.S. have had a 
free-trade pact since the beginning of 1989. 
the real point of NAFTA is to encourage the 
Mexican economy. Higher economic 
growth, so goes the argument, would 
ultimately reduce illegal immigration hito the 
United States, because Mexicans could stay 
home and get jobs. A more prosperous 
Mexico would help some U.S. faidustries. 
One example often givea is the automobile 
industry. Mexico has about 8 cars per 100 
people, conqwred to S7 per 100 for the 
United States. A richer Mexico would buy 
more cars, and many of these would be 
designed and built in tbe United States. 

The idea of a fiee-trade zone among the 
three countries was first suggested by Ronald 
Reagau iu his prestdemial cao^gn of 1980. 
It did not receive active consideration until 
proposed by Mexican President Carlos 
Salinas de Goriari to George Bush rn 1990. 
With then-Canadian Prime Minister Brian 
Mulroney joining in, trilaiavl n^otiadons 



begun in 1991 and dragged on until May 
1992, when it was decided to postpone U.S. 
congressional action until after the einctioas. 

One of Bush's last acts as president was 
to sign die completed agreement in E)ecem- 
ber and pass it to Cuogress, where tt awaited 
the new president. Bill Clinton. Congressio- 
nal action was further delayed while the 
Clinton Administration hammered out side 
agreements on environmental quality and 
labor standards. Then the round uf negotia- 
tions with Canada and Mexico began, 
slowed by the Qinton Administration's focus 
on its domestic economic pnckage. Finally, 
on August 13, 1993, the White House nadc 
public Clinton's Supplemental AgrceoKnu lu 
NAFTA. 

With these side agreements added, 
Presidoit Clinton proclaimed that NAFTA is 
a foir trade agreement as well as a free 
trade agreement. 

If approved by the l^islatures of all 
three countries, NAFTA will go into effect 
on January 1, 1994. NAFTA was spptovtd 
by the Canadian parliamoit eariier this year, 
and is expected to pass the Moxican Senate 
whfaout difficulty. In the United States, the 
NAFTA package requires appKr/H by a 
simple n^Jotity in the House and Senate and 
is meeting strong resistance by environmen- 
talists, unions and huscinesses likely be hurt 
by his provisions. 

WHAT'S WRONG WITH NAJ-IAV 

Many environmental groups have 
charged that NAFTA will lead to environ- 
mental d^radation on both sides of the 
border. One fear is that American businesses 
might relocate to Mexico, where enforce- 
ment of eoviionmental laws is lax. 

Opponeitts to NAFTA give several 
scenarios if the agreement is passed: 



L 



160 



• The United States migbt not be able to 
block impuits of foods that ccHitain 
residues of pesticides, like DDT, wldch 
i$ banned is the U.S. but not elsewhere. 

• The Mexican timber industry might be 
persuaded to cut more old growth 
timber to compete with the quality and 
quantity of U.S. and Canadian lumber 
industries. As a result, diversity of 
forest species is threatened. 

• Mexican forests, and therefore wildlife 
habitats, may be lost as land is con- 
verted to more profitable citrus and beef 
production for United States markets. 
A minority of eovironmentalists supports 

NAFTA, arguing that many of die feared 
inqiacts of NAFTA have already occurred as 
a result of tariff reductions under the 
General Agreement on Tariff and Trade 
(CATT)- Mexican timber producers are 
undei. pressure now from increasmg imports 
of cheaper American wood. Free trade 
proponents argue that raising Mexico's 
economic levels will give the environmen- 
tally-receptive Clinton Administration the 
means to raise cnviroiuueotal standards. 

On June 30, U.S. Distria Judge Charles 
R. Ricbey ruled that NAFTA violates the 
National Environmental Policy Act (NEPA), 
and ordered an Environmental Inqjact 
Statement (EIS) of the effecb of NAFTA. 
Ricbey acted in a suit filed by Fricads of the 
Earth, the Siena Oub, and Public Citizen (a 
public interest advocacy group founded by 
Ralph Nader). Following tjhe lead of the 
Bush Administradoo, the Qintoa Adniiuis- 
tration bad contended dat NAFTA was not 
subject to NEPA because it would uncoosti- 
totionally limit the president's right to 
conduct foreign policy and n^otiate treaties. 
(As a presidential candidate, Clinton said 
NAFTA did require an EIS.) Tbe United 
States Court of Appeals will bear the Justice 
Depuitment's appeal of the District Court 



ruling. 

While a presidential candidate, Ointon 
campaigned as a supporter of NAFTA with 
the requirement that additional measures 
would have tn be. taken in the ams of labor 
and environmental safeguards to ensure his 
support of the agreement However, the side 
agiceoients tie agreed to in August were so 
watered down that NAI'TA fails to include 
most of the current animal welfare and 
conservation laws. In a letter to Congress 
endorsing Judge Richey's decision (a letter 
cDdorscd by 174 organizadons, including 
API), the Society for Animal Protective 
Legislation pointed to "die important body of 
animal protective laws which are not 
protected in the current NAFTA, have been 
excluded from coosideratioij uf die environ- 
mental siqjplemental agreement, and will not 
receive due protection even if an fEnviron- 
mental Impaa Statement] is undertaken." 

"ILLEGAL" BARRiratS TO TRADE 

If NAFTA is accepted, any laws — 
animal i^otective laws as well as cnvinm- 
mental, health, and safety regulations and 
laws (federal, state and local) — could be 
challenged as "noiHariff barrtcrs" to Tree 
trade." Congress would then be conq>elled to 
repeal the l^lslation or pay heavy damages. 
141WS that protect animals (see page 4) block 
the ifflpoitatiai of products that involve 
cruelty to animals or damage to the cavtron- 
ment, thus protecting U.S. citizens from 
economically contributii^ to inhumane 
pracdces. 

Mexico has already successfiilly chal- 
lenged one long-standing environmental law, 
the Marine Mammal Protection Act. The 
law forbids sellir^ tuna caug^ with methods 
dial UU dolphins, the UATT tribunal 
declared the law an illegal barrier to trade, 
and ordered the United States to eliminate 
the law or face trade sanctions. Luckily, 



Page 2 



161 



GATT has cenain pFOcedural emergency 
provisions (that NAFTA lacks) that have 
stalled the dolphin case. 

The same mechanism that deals with 
violations of ravinnmental laws will also 
ktau di)dlcug«» lu eusting laws. The North 
American Agreement on Environmental 
Cooperation sets up three commissions, one 
in each country, to address concerns in 
labor, environment, and imports. Five trade 
officials will be appointed to iiU each 
commission. Each country's commission will 
change its focus on a revolving basis. 

Presumably, conq)laiiits of a country's 
violation of its animal welfore laws could 
only be submitted within the cootcxt of 
environmental violation complaints. 

Complaints could be lodged with the 
commissions. The countries would try to 
solve any complaint through negotiation. If 
that failed, a paoel of experts ^m the three 
countries would evaluate the complaints. A 
conq)laint found to be valid wwild require 
the ofliending government to eafotct its laws 
within 60 days. In the event the offending 
government neglected to act, the panel 
would have 60 days to come up with its own 
enforcement plan and levy a fine of up to 
$20 million. As a last resort, sanctions, such 
as duties or quotas, could be iasposed 
against the U.S. or Mexioo; in CRnada, the 
federal court of Canada would order the 
Canadi a n government to pay die fine, 
otherwise Cauada could lose its NAFTA 
benefits. 

This formal review process will be 
dosed to public access or participation, dius 
denying Congress or the public any knowl- 
edge of whether our conservatiou statutes are 
being defended or made to conform to 
Canadian or, more likely, Mexican de- 
mands. 

NAFTA contains no provision requiring 
the enactnNat of new legislation to briitf the 



three counoies' envtronmental laws into 
accord. 

Becau.<£ the United .Stxtes has become 
such a large market for wildlife or its by- 
products, we have shared responsibility for 
the way wildlife trade is conduaed. For 
decades the U.S. has worked to establish 
laws to regulate wildlife trade. Our laws 
have set conservation standards especially in 
regard to the "production process methods" 
— Uic way wildlife was caught, harvested, 
or killed. The U.S. Congress must insist that 
it be allowed to go forward widi animal 
welfare legislation, and not allow the 
decades of legislation to be jeopardized by 

NAFTA. 

'As the Ointon Administration is 
learning, the passage of such a broad 
agreement will not go down easily," said 
David Berkman, API Executive Director. 
"Fortunately, many affected groups, raiigmg 
from tabor to environmemai, have raised 
serious concerns. If, by some chance, which 
at this point looks somewhat slim, the 
Agreement is approved by Congress, I am 
sure these same groups will for years, as the 
Agreement is put into place, stand by as 
vigilant watch dogs. Therefore, even if 
NAFTA is given a short-term victory, there 
will be many opportunities for concerned 
groups such as API to point out specific 
areas of neglect as well as those in need of 
refinement." 

At press time, congressional approval 
for NAFTA seems to be increasingly 
delayed. As API members you can write 
your legislatoi^ and voice your concern for 
the protection of all hard-won animal 
welliue and conservation laws. Whether or 
not NAFTA passes, our woric is fer from 
complete. We must coatiau« to urge 
Congress to consider the negative effect on 
wildlife throu^KXit the long implementation 
process or the Agreement. 



Page 3 



162 



BOSTON PUBLIC LIBRARY 



3 9999 05982 659 2 



UNRAVELING ANIMAL LEGISLATION 



More tbm tbiity years of ammol protection laws uould be seriously 
compromised by NAFTA, including (but not limited to): 



• The Wild Bird Coiiservation 
Act, wliidi bans importing species 
most threatened by the pet trade 
and by habitat loss. 

• The Marine Mammal Protection 
Act, widck prohibits importing 
tuna taken in violation of effective 
agreemeste to protect dolphina, 
and restricts harassment and 
killing of marine mammals. 

• The Lacey Act, whidi prohibits 
importing wildlife in violation of 
&e laws of the wildlife's country 
of origin. 

• The Endangered Specks Act, 
whidi prc^bits commercially 
importing any species listed under 
the Act as threatened or endan- 
gered. 



• The International Dolphin 
Conservation Act, v^di estab- 
lishes a global moratorium on 
methods of tuna fishing that kill 
dolphins and wliidi requires 
imported tuna to be "dolphin- 
safe." 

• The Pelly Amendment to the 

1967 Fisherman's Protective Act, 
whidi authorizes the embargo of 
wildlife products from nations 
whose practices diminish the 
effectiveittss of international 
conservation agreements. 

• The Federal Humane Slai^fater 
Act, which requires that in^x>rted 
meat be slau^tered under humane 
standards equivalent to U.S. law. 



Page 4 



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163 



ANSWERS TO REPRESENTATIVE TAUZIN'S QUESTIONS 
SUBMITTED FOR THE RECORD AT HMMF HEARING 11/10/93 

Question; 

IMPACT OF NAFTA ON MARITIME PILOTAGE 
Is there any provision in the NAFTA agreement that would: 

1. comj3el a state or federal pilot licensing authority in the 
United States to issue a pilot license to a citizen of 
Mexico or Canada? 

2. compel a state or federal pilotage authority in the United 
States to recognize a Mexican or Canadian pilot license or 
to otherwise permit a pilot licensed by Mexico or Canada to 
perform pilotage services in United States pilotage waters? 

3. permit a vessel with a pilotage exemption issued by either 
Mexico or Canada to use the exemption in waters under the 
jurisdiction of state or federal pilotage authorities in the 
United States? 



Answer ; 



No, nothing in the NAFTA would require any of the three 
actions described in your question. In Annex II of the 
NAFTA, the United States took an express reservation for 
existing and future water transportation measures that do 
not conform to NAFTA' s provisions regarding national 
treatment, most-favored nation treatment, local presence, 
and performance requirements, among others. The US 
reservation provides that "the United States reserves the 
right to adopt or maintain any measure relating to the 
provision of maritime transportation services and the 
operation of U.S. -flagged vessels, including the following: 



(f) certification, licensing and citizenship 

requirements for pilots performing pilotage 
services in U.S. territorial waters." 



75-696 (168) 



ISBN 0-16-0A4004-1 



780160"4400A5 




90000